NEW JERSEY SALVAGE VEHICLE LAW 

 

                                                        Accident vehicle  

 

Sellers of salvage vehicle may not disclose the damage and claims may be brought for violation of the Consumer Fraud Act.

13:21-22.1 Purpose

(a) N.J.S.A. 39:10-31 et seq. provide for the issuance of salvage certificates of title and regulate the transfer of ownership of salvage motor vehicles. The purposes of this subchapter are to:

1. Establish standards and procedures necessary to protect the public from fraud by preventing negotiable certificates of ownership for salvage motor vehicles from being used to title or register stolen or other motor vehicles;

2. Establish standards and procedures necessary to protect the public from fraud by providing for the seizure of salvage motor vehicles which are determined, after inspection pursuant to this subchapter, to be stolen or reconstructed, rebuilt or repaired using parts from stolen motor vehicles.

3. Establish standards and procedures necessary to notify the public that a salvage motor vehicle has been subsequently reconstructed, rebuilt or repaired;

4. Establish standards and procedures for the issuance of salvage certificates of title;

5. Establish a system which regulates the transfer of ownership of salvage motor vehicles only as salvage motor vehicles until a negotiable certificate of ownership is obtained;

6. Establish standards and procedures for the inspection of salvage motor vehicles;

7. Establish standards and procedures for the issuance of negotiable certificates of ownership after the salvage motor vehicle has been inspected in accordance with the requirements of this subchapter; and

8. Establish standards for the issuance of salvage and/ or negotiable certificates of title that do not cause unreasonable burden to persons or entities licensed by the Chief Administrator as auto body repair facilities, junk yards and/or motor vehicle dealers.

13:21-22.2 Prohibition on transfer

(a) This subchapter shall apply to every motor vehicle which is reported stolen or is damaged to such an extent that it is economically impractical to repair.

(b) No person shall, on or after the effective date of this subchapter, transfer the ownership of a salvage motor vehicle except as a salvage motor vehicle until the owner obtains a certificate of ownership in accordance with this subchapter.


13:21-22.3 Definitions

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.

"Bona fide repair estimate" means any written determination of the approximate cost of parts and labor required to repair the damaged motor vehicle that is prepared by an auto body repair facility licensed pursuant to N.J.S.A. 39:13-1 et seq. or by an adjuster of an insurance company licensed to do business in New Jersey. Licensed auto body repair facilities shall prepare the estimate in accordance with 13:21-21.10. In the event that more than one such repair estimate is prepared for the damaged motor vehicle, then the highest repair estimate shall be used to determine if the damaged motor vehicle is economically impractical to repair. This term does not include any repair estimate prepared by the motor vehicle owner.

"Economically impractical to repair" means that the motor vehicle is damaged to such an extent that:

1. For those motor vehicles manufactured eight or less model years from the current model year, the cost to repair such damaged motor vehicle, as determined by a bona fide repair estimate, equals or exceeds the fair market value of the motor vehicle immediately before it was damaged; or

2. For those other motor vehicles where the fair market value of such damaged motor vehicle immediately before it was damaged equals or exceeds the fair market value of a motor vehicle of the same make and model manufactured five years from the current model year, or similar make and model if the same make and model is no longer manufactured, if the motor vehicle has sustained damage to the extent that either:


i. The cost to repair such damaged motor vehicle, as determined by a bona fide repair estimate, equals or exceeds the fair market value of the motor vehicle immediately before it was damaged; or

ii. The insurer settles a total loss claim with the motor vehicle owner as a result of the damage to the motor vehicle.

"Fair market value" means the retail value of the motor vehicle as determined by the average of the official valuation manuals approved by the Commissioner of the Department of Banking and Insurance in accordance with auto physical damage claims, 11:3-10. In the event that the retail value of the motor vehicle is not listed in the official valuation manuals, then the retail value of the motor vehicle may be determined by any other valuation method approved by the Commissioner of the Department of Banking and Insurance, in accordance with auto physical damage claims.

"Owner" means the owner of record with the Commission on the date that the motor vehicle was stolen or sustained sufficient damage to render it economically impractical to repair.

"Person" means any natural person, business, firm, partnership, association, corporation, or any other entity.

"Salvage certificate of title" means the document issued by the Chief Administrator pursuant to N.J.S.A. 39:10-31 et seq., or a similar document issued by another state, which serves as proof of ownership of a salvage motor vehicle.

"Salvage motor vehicle" means any motor vehicle which has been reported stolen or is damaged to such an extent that it is economically impractical to repair.

"State inspection" means an inspection conducted by persons approved and designated by the Chief Administrator to inspect salvage motor vehicles.

13:21-22.4 Issuance of salvage certificates of title; fee

(a) Whenever a motor vehicle is reported as being stolen or is damaged to such an extent that it is economically impractical to repair such motor vehicle, the owner, insurer or person in possession of the certificate of ownership shall, within 10 working days after the motor vehicle was reported as stolen or damaged, or within 10 working days after settling a total loss insurance claim, surrender the certificate of ownership for such motor vehicle to the Commission.

(b) Upon surrender of the certificate of ownership, as required by (a) above, the Chief Administrator shall issue a salvage certificate of title to the owner of the salvage motor vehicle, after determining that the person applying for a salvage certificate of title is the owner of record; provided, however, that if the salvage motor vehicle is owned subject to a lien, a salvage certificate of title shall be issued in the name of the vehicle owner and shall be delivered to the lienholder of record by the Commission.

(c) A lienholder of record shall be noted on the salvage certificate of title until the lien is properly satisfied and discharged in accordance with N.J.S.A. 39:10-10.

(d) A fee, set forth in N.J.S.A. 39:10-11, shall be charged for the issuance of a salvage certificate of title.

13:21-22.5 Subsequent transfer of salvage motor vehicles

(a) Until such time as the owner obtains a certificate of ownership in accordance with this subchapter, no person shall transfer ownership of a salvage motor vehicle except by proper assignment and delivery of a salvage certificate of title.

(b) No salvage motor vehicle shall be sold at auction, or otherwise disposed of, in this State except by proper assignment and delivery of a salvage certificate of title.

(c) The buyer of a salvage motor vehicle shall, within 10 working days after its purchase, apply for a new salvage certificate of title. The Chief Administrator shall issue a new salvage certificate of title to the buyer upon surrender of the previous salvage certificate of title properly executed and assigned by the seller, together with the required title fee and New Jersey sales tax.

(d) Whenever ownership of a salvage motor vehicle is transferred by a motor vehicle dealer in accordance with N.J.S.A. 39:10-19, the dealer may assign and attach a dealer reassignment certificate to the salvage certificate of title.

13:21-22.6 Salvage motor vehicles precluded from obtaining a registration

(a) A salvage motor vehicle shall not be registered for the purpose of being driven or operated on the public highways of this State, except in accordance with 13:21-22.11.

(b) The Chief Administrator shall deny registration, except a temporary registration issued in accordance with 13:21-22.11, to the owner of a salvage motor vehicle until the owner obtains a certificate of ownership in accordance with this subchapter.

13:21-22.7 Inspection of salvage motor vehicles which are subsequently reconstructed, rebuilt or repaired

(a) A salvage motor vehicle that has sustained damage to such an extent that it has been rendered economically impractical to repair, including a stolen motor vehicle that is recovered in such condition, and that is subsequently reconstructed, rebuilt or repaired must be inspected in accordance with 13:21-22.10(a) to determine the accuracy of its vehicle identification number and/or any identification numbers of any major component parts used to reconstruct, rebuild or repair the motor vehicle before a certificate of ownership will be issued for the motor vehicle.

(b) The following documents must be presented to the Commission before the salvage motor vehicle will be inspected:


13:21-22.16 Penalties

(a) Any person who transfers or obtains ownership of a salvage motor vehicle except by proper assignment and delivery of a salvage certificate of title shall be subject to the penalties set forth in N.J.S.A. 39:10-24.

(b) In addition to the penalties set forth in (a) above, the Chief Administrator may suspend or revoke the license of any person who is licensed by the Chief Administrator as an auto body repair facility, junk yard and/or motor vehicle dealer for a period not to exceed three years if such person transfers or obtains ownership of a salvage motor vehicle except by proper assignment and delivery of a salvage certificate of title.


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