Illinois Salvage Title Laws

Flooded car
Flood water can cause extensive (and unseen) damage. David Greedy/Getty Images

Illinois could be considered to have some of the toughest salvage title laws in the U.S.A. based on its definition of salvage and proactive stance.

In Illinois, all titles (salvage and regular) are handled by the Secretary of State's office. You're going to find all the information you need by heading to the CyberDrive Illinois website. It's pretty thorough and is going to help you discover the answers you need about salvage title vehicles in Illinois.

Low Salvage Threshold

Illinois says a vehicle has a salvage title at the relatively low threshold of 33.3 percent damage of its fair market value. In this day and age of expensive electronics, safety equipment, and body parts, it seems as if it would be easy for a $15,000 vehicle to suffer $5000 in damage in a relatively minor crash and be deemed salvage.

In Illinois, there is a strange quirk in the law. Vehicles nine years or younger cannot be sold back to the consumer who owned them when a title is designated salvage. However, a used car that is more than nine years old can be sold back to the consumer.

That is something you should be aware of when buying a used car nine years or younger with an Illinois salvage title designation. When you do your CarFax or AutoCheck report on the vehicle make sure the used car was once owned by an insurance company.

I have an article on how to read a CarFax report that is going to help you determine quickly if a used car has flood or title problems.

It's money well spent for peace of mind.

Rebuilt Titles

One thing the Illinois law does not address is how used cars are designated salvage that is owned with no insurance company involvement (i.e. the owner does not file an insurance claim or lacks collision coverage). That means you need to be especially circumspect if any red flags are raised by a vehicle history report.

You can buy a repaired salvage titled used car from a licensed rebuilder in Illinois. The used car will be issued a new title. However, there should be a disclosure that it was once a salvage vehicle.

Also, that means you can't fix a salvage vehicle yourself and expect it to have a new title. It's only going to happen if a licensed rebuilder is involved. Used cars brought back from salvage title status will have a status that clearly indicates it is rebuilt. Also, any vehicle eight years or new in Illinois with the rebuilt designation needs to be physically inspected before it can have the designation.

Illinois Flood Titles

Illinois is extremely proactive when it comes to flood titles, which effectively should be treated as salvage titles. According to Illinois law, "A vehicle that has been submerged in water to the point that rising water has reached over the door sill and has entered the passenger or trunk compartment is a "flood vehicle"."

It is possible that a used car can be a "flood vehicle" under Illinois law and not be a salvage vehicle. The vehicle has to suffer the same threshold of damage (33%) before it is considered salvage. However, regardless of the damage, once a used car is in a flood, it will forever bear a flood designation on its title.

Few states are that proactive.

Something to consider when buying a vehicle with a salvage title in Illinois is you're not going to be able to test drive it. Under Illinois law, any vehicle that "is salvage or junk may not be driven or operated on roads and highways within" Illinois unless it's being driven for an inspection. The state can also issue a short-term permit that will allow a vehicle to be driven. Make sure the used car has that before hopping behind the wheel for a test drive. Sure, the owner will be ultimately liable, but who wants a headache if something happens during the test drive?

Illinois Junking Certificate

There's another class of title in Illinois called a "junking certificate." You'll never want to buy a used car that at any point in its existence has been titled with a junking certificate.

As the State of Illinois so eloquently puts it, " This document is considered the death certificate of a vehicle." You should never buy a used car that has been designated with a death certificate. Vehicles can't be brought back from the dead.

An important aspect of the junking certificate is its consumer protection angle. The Illinois Secretary of State's office "detects vehicles that previously were junked in Illinois and have been "washed" (registered and/or titled) by other states and returned to Illinois. Once a vehicle has been issued an Illinois Junking Certificate, it can never be eligible for title and registration in Illinois again. This prevents a car thief from taking a VIN from a vehicle junked in Illinois and using it on a stolen vehicle in Illinois." It's a high level of consumer protection.

Hurricane-Damaged Vehicles

Illinois has also been active on vehicles that may have been damaged after the hurricanes of 2005. According to the Illinois Secretary of State, "All vehicles seeking a clean Illinois Certificate of Title using a surrender title from Louisiana, Alabama or Mississippi" have to go through a strict procedure including being cleared through the National Insurance Crime Bureau database.

Here is what Illinois says:

  • If the vehicle is not in that database, the application will be further reviewed to determine if it was registered in a flood county.
  • If the vehicle appears in the NICB database, the vehicle will be issued an Illinois Flood Title only (regardless of whether or not a branding appears on the surrendered title).
  • If the vehicle is not in the NICB database but was registered in a flood county, a Hurricane Disclosure Statement must be completed in order to obtain a clean Illinois title. This statement must be signed by the registered owner and insurance agent at the time of the hurricane. Any applicant unable or unwilling to supply the signed form will receive an Illinois Flood Title only (regardless of whether or not a branding appears on the surrendered title).
  • Vehicles with clean surrender titles from these states that do not appear in the NICB database and were not registered in a flood county will receive clean Illinois titles.
  • Vehicles coming to Illinois with a title branded from one of these states will be treated the same as previous policy and receive a similar Illinois branding.