Rules for Selling Cars in Tennesee With Salvage Titles

Vehicles with salvage titles are not legal on Tennessee roadways. However, it is legal to sell cars in Tennessee that have only what is known as a salvage certificate. If the buyer and seller follow a few simple rules, as outlined by the Tennessee Department of Revenue, the process can be done legally at the local county clerk's office. For businesses that purchase salvage vehicles, the process is a bit more detailed.

According to the Tennessee Department of Revenue, an owner of a salvage vehicle less than 10 years old must submit the original title and a completed application for a Tennessee Salvage Certificate to the Department of Revenue. After the application is processed by the state, it is returned to the vehicle owner. If the owner decides to repair and resale the vehicle, a second application process must be completed. Information needed to apply for a Tennessee Salvage Certificate includes the Vehicle Identification Number, the odometer reading, and make, model, and the year of the vehicle.

An owner of a vehicle with a salvage certificate begins the process for reinstatement of a valid Tennessee title by completing an Application for Motor Vehicle Identification and Vehicle Components. This document, along with the salvage certificate, receipts for replacement parts, and colored photographs of the vehicle are sent to the Tennessee Department of Revenue, along with a $75 fee as of 2011. Once the state stamps the salvage title, it is returned to the owner, who may then take the appropriate documents to the local county clerk's office for a Tennessee vehicle title and registration.

Even though an owner may have a salvage vehicle repaired or rebuilt, the state of Tennessee will issue a title only with the pertinent information included. Therefore, all potential future owners of the vehicle will have the opportunity to know the history of the vehicle. Tennessee law allows only towing companies to apply for titles to abandoned and unattended vehicles regardless of the condition.

If an individual sells a vehicle with a salvage title to a scrap yard or a business that dismantles cars for parts, the business owner must maintain clear and accurate records. For vehicles less than 10 years old, records on the seller and the vehicle must be maintained for a minimum of three years. For older cars, the law requires that personal information on the seller be recorded and maintained, but a title is not necessary and salvage vehicles may be transferred simply from one owner to another.