Alabama Car Title Laws

Code of Alabama Title 32, Chapter 8, Article 2

• AL Code § 32-8-37
• AL Code § 32-8-87

Every motor vehicle owner who scraps, dismantles, destroys, or changes the vehicle in such a way that it is no longer the same motor vehicle described in the original or most recent certificate of title must mail the title to the Department for processing as soon as possible.

Once the Department has the consent of any lien holders on the surrendered certificate, it will cancel the title. A cancellation cancels all certificates of origin and certificates of title in that chain of title.

The Department will not issue another title for the vehicle until someone submits an application for one. (§ 32-8-87(a))

A motor vehicle is considered salvage in the following circumstances:

• When someone removes the frame or engine from a motor vehicle and does not immediately replace it, or
• When an insurance company pays money or makes other monetary settlements as compensation for the total loss of a motor vehicle.

An owner of a salvage or total loss vehicle must apply for a salvage certificate of title within 72 hours of the loss or salvage. They must also forward the certificate of original title or certificate of title to the Department. (§ 32-8-87(b))

No person can drive a motor vehicle that has a salvage or junk title on Alabama's highways or other public places (regardless of the state that issued it). However, a person restoring a salvage title vehicle to its operating condition may move it to and from repair or inspection points in Alabama to complete the restoration. The vehicle must have a valid Alabama dealer license plate during the movement. Violating this subsection is a Class A misdemeanor. (§ 32-8-87(a))

An insurance company that pays money or other monetary settlement as compensation for the total loss of a motor vehicle must obtain the vehicle's title and forward it to the Department as soon as possible after receiving it. The insurance company must also forward its application for a salvage certificate. (§ 32-8-87(b))

If an insurance company makes a payment or monetary settlement due to a vehicle's theft, state law considers it a total loss. The insurance company must forward the vehicle's title to the Department as soon as possible after the vehicle's recovery.

When an owner reports a stolen motor vehicle as recovered, and the Department issues a salvage title, the owner recorded on the salvage title must assign the certificate to the purchaser.

Violating this section is a Class A misdemeanor. (§ 32-8-87(b))

A total loss occurs when an insurance company or person pays another person for a damaged vehicle, and the damage is greater than or equal to 75% of the vehicle's fair retail value before the damage.

Damage refers to the actual damage to the motor vehicle (i.e., it does not apply to medical care, bodily injury, or vehicle rentals). A vehicle that sustains minor damage resulting from theft or vandalism is not a total loss.

Suppose the Department has not issued a salvage title yet. In that case, a person who acquires ownership of a damaged vehicle that meets the definition of a total loss must apply for one within 30 calendar days of acquiring ownership.

A scrap metal processor does not need to apply for a salvage title if they intend to recycle the vehicle for scrap. (§ 32-8-87(c))

It is unlawful for an owner, employee, or agent of a junkyard, salvage yard, or automotive dismantler and parts recycler to possess a junk, salvage, or total loss vehicle when the vehicle identification number (VIN) plate(s) has been removed (unless it was removed by a law or statute). (§ 32-8-87(e))

Violating § 32-8-87(e) is a Class A misdemeanor.

It is unlawful to sell, exchange, or give away the following with respect to any scrapped, dismantled, junk, salvage, or total loss motor vehicle in violation of § 32-8-87:

• The manufacturer's certificate of origin (i.e., the original title)
• Certificate of title
• Salvage certificate of title
• Manufacturer's identification number plate(s)
• Authorized replacement VIN plate(s)
• Serial plate(s)
• Motor vehicle license plate(s)

Any person who transfers any of the above in violation of § 32-8-87 is guilty of a Class A misdemeanor. (§ 32-8-87(f))

An insurance company that obtains ownership of a motor vehicle that is not a total loss in settlement of an insurance claim and holds it for resale does not have to send the certificate of origin or title to the Department. However, if the insurance company transfers the vehicle to another person, it must do the following:

• Complete an affidavit of acquisition and disposition of the vehicle using the Department's forms.
• Deliver the certification of origin or certificate of title to the transferee by the time of the delivery.
• Deliver the affidavit and any other required documents to the transferee that the Department specifies by the time of the delivery. (§ 32-8-87(c))

A person who signs as an assignor or a person who has a salvage certificate of title that the owner as assignor signed without the assignee's name or other information the Department requires on it commits a Class A misdemeanor. (§ 32-8-87(h))

An owner who sells or transfers a salvage or junk motor vehicle must provide the following on the salvage or junk certificate of title to the transferee:

• A property executive assignment
• A property executed warranty of title

A person who willfully does not provide the above to the transferee commits a Class A misdemeanor. (§ 32-8-87(i))

Any person who sells a salvage or restored/rebuilt vehicle must disclose in writing to the buyer that the title designates the vehicle as restored or rebuilt. The seller must make the written disclosure before or at the time of the sale, which must contain the following statement in 10-point type or larger: "This vehicle's title contains the designation salvage or rebuilt." (§ 32-8-87(p))

Every owner of a salvage motor vehicle designated a 1975 year model (and all model years after it) that they restored to an operating condition must apply for the Department to inspect the vehicle. Each application must include all of the following:

• The outstanding salvage certificate or out-of-state title for the vehicle. (§ 32-8-87(k)(1))
• Any notarized bills of sale that evidence the acquisition of component parts used to restore the vehicle (subject to some exceptions). (§ 32-8-87(k)(2))
• Evidence that the owner is a licensed motor vehicle rebuilder (unless the law exempts them from the licensing requirement) or prior documentation that shows the owner owned the vehicle prior to the Department's issuance of a salvage title. (§ 32-8-87(k)(3)).
• A written affirmation stating the actions they took to restore the vehicle to its operating condition, among other things. (§ 32-8-87(k)(4)(a)-(f))

A person who applies for an inspection of a restored vehicle must pay the $75 application fee to the Department. (§ 32-8-87(l)). All application and title fees the Department receives go towards the costs of its vehicle inspection program. Once the Department receives the application fee, title fee ($15), and all supporting documents, qualified licensing officials or law enforcement officers will inspect the title and vehicle. (§ 32-8-87(l)(1))

If the Department issues a certificate of title to a salvage vehicle that a person restored to its operational condition, the title will contain the word "rebuilt." (§ 32-8-87(n)).

The Department will also issue a decal, plate, or other emblem to reflect the vehicle's rebuilt status and require the owner to attach it to the vehicle. (§ 32-8-87(o)(1)). Willfully removing, tampering with, destroying, or mutilating the emblem is a Class A misdemeanor. (§ 32-8-87(o)(2))

Suppose an insurance company pays a total loss for a motor vehicle due, at least in part, to water damage. In that case, the law deems it a "flood vehicle," and its certificate of title must contain a flood vehicle designation. (§ 32-8-87(q)(1))

Any person who sells or otherwise transfers a flood vehicle must disclose in writing to the buyer that the title designates it as a flood vehicle. The seller must make the written disclosure before or at the time of the sale, which must contain the following statement in 10-point type or larger: "The certificate of title of this motor vehicle contains the designation flood vehicle." 32-8-87(q)(2))