A “Salvage Vehicle” is defined as one that is "damaged in excess of fair market value." The causes can be several: collisions, fires, theft and vandalism, or natural disasters.
Usually, we think of these vehicles as being in junkyards or in a scrap heap being dismantled for spare parts. But the truth is salvage vehicles provide a decent job source for an assortment of persons and organizations that choose to rebuild and resell these vehicles. This is a delicate business and there are many steps and forms to fill out to guarantee the salvaged vehicle is good for use.
The first step is converting whatever title the car once had into a salvage title. This can be done by completing the Application for Salvage Title form stating the vehicle is no longer in use on the road. The state will then issue a salvage title which allows you to sell the vehicle without having to repair it. However the new owner will need to acquire a salvage title in his/her name.
To obtain a Regular title for a vehicle holding a Salvage title, you must:
Fill out a Salvage Title Statement of Fact. This form asks for specification regarding the methods and parts used to transform the vehicle into an “acceptable to drive on Colorado roads” condition.
Sign the declaration of roadworthiness on the Salvage Title.
Colorado law requires that the words "Rebuilt from Salvage" be engraved or stamped onto the vehicle in letters 1/4 inch high or larger. The most common place for this stamp is on the driver’s door’s post.
The vehicle must be inspected (fee of $20) and a Verification of Vehicle Identification Number completed by a law enforcement officer. Contact your local title and registration office for a referral. The inspection must be less than twelve months old.
Visit your local title and registration office. Bring all forms, receipts for parts, and inspection approval to complete the application process.
A Certificate of Title will be issued with the expression "Rebuilt from Salvage" tagged on it.
When selling the vehicle you must fill out a Rebuilt from Salvage Disclosure form, which the new owner must bring to the county motor vehicle office when transferring the title.