NEW JERSEY SALVAGE VEHICLE REGULATIONS

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Introduction

This page provides the language of the New Jersey Salvage Vehicle Regulations – New Jersey regulations about “salvage motor vehicles" meaning any motor vehicle which has been reported stolen or is damaged to such an extent that it is economically impractical to repair.

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 N.J.A.C. 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.

"Chief Administrator" means the Chief Administrator of the New Jersey Motor Vehicle Commission.

"Commission" means the New Jersey Motor Vehicle Commission established by section 4 of P.L. 2003, c. 13 (N.J.S.A. 39:2A-4).

"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, N.J.A.C. 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.A.C. 13:21-4.2, 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 N.J.A.C. 13:21-22.11.

(b) The Chief Administrator shall deny registration, except a temporary registration issued in accordance with N.J.A.C. 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 N.J.A.C. 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:

1. Salvage certificate of title;

2. Notice of appointment obtained in accordance with N.J.A.C. 13:21-22.10;

3. Bill of sale as proof of ownership for each major component part used in the reconstruction, rebuilding or repair of the motor vehicle, including the following parts:

i. Engine;

ii. Transmission or transaxle;

iii. Front bumper;

iv. Rear bumper;

v. Each fender;

vi. Hood or engine cover;

vii. Each door;

viii. Each quarter panel;

ix. Decklid, tailgate or hatchback (whichever is present);

x. Roof (including T-tops/removable roof if present);

xi. Cowl;

xii. Frame;

xiii. Shock tower or apron; and

xiv. Assembled items:

(1) Nose (fenders, hood, bumper, radiator support);

(2) Front clip (cowl, frame section, shock and apron structure);

(3) Rear clip (rear sheet metal, frame section, roof);

(4) Short clip (rear clip without roof); and

4. A set of "before" and "after" color photographs of the motor vehicle. Each set of "before" and "after" color photographs shall consist of:

i. One photograph showing the entire front and entire left side of the motor vehicle; and

ii. One photograph showing the entire rear and entire right side of the motor vehicle.

(c) The bill of sale for each major component part shall include the following information:

1. Name and address of the buyer;

2. Name and address of the seller;

3. Date and the purchase price; and

4. For parts, as follows:

i. For a new part: description of the part and part number; or

ii. For a used part: description of the part, the vehicle identification number (if available), make, model, and year of the motor vehicle from which the part was removed, the date the part was dismantled or removed (if available), and the name and address of the person or business which dismantled or removed the part. If the vehicle identification number is not indicated on the bill of sale, then the owner must obtain a letter from the seller or person who dismantled or removed the part stating why the vehicle identification number was not indicated on the bill of sale.

(d) If the motor vehicle had been reported stolen, then the owner must also present a copy of the report from the law enforcement agency which recovered the stolen motor vehicle.

(e) It is the responsibility of the owner to arrange satisfactory transportation of his or her salvage motor vehicle to have it inspected (for example, flatbed truck, towing by means of an approved towing device, temporary registration).

13:21-22.8 Inspection of stolen motor vehicles recovered with damaged or missing vehicle identification numbers

(a) A stolen motor vehicle that is subsequently recovered with a missing, altered or damaged vehicle identification number or plate must, whether or not the vehicle has been damaged, be inspected in accordance with N.J.A.C. 13:21-22.10(b) to determine the accuracy of its vehicle identification number before a certificate of ownership will be issued for the motor vehicle.

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

1. Salvage certificate of title;

2. Copy of the report from the law enforcement agency which recovered the stolen motor vehicle; and

3. Notice of appointment obtained in accordance with N.J.A.C. 13:21-22.10.

13:21-22.9 Inspection of stolen motor vehicles recovered without damaged or missing vehicle identification numbers and without damage sufficient to be rendered economically impractical to repair

The inspection performed upon a recovered stolen motor vehicle by the recovering law enforcement agency to ascertain ownership of the vehicle shall be deemed sufficient inspection for purposes of the issuance of a certificate of ownership to the owner of such vehicle pursuant to N.J.A.C. 13:21-22.14, provided that the recovered stolen vehicle does not have a missing, altered or damaged vehicle identification number or plate and has not sustained damage to such an extent that it has been rendered economically impractical to repair.

13:21-22.10 Inspection; appointment; inspection fee; rescheduling

(a) As a prerequisite to the issuance of a certificate of ownership, a salvage motor vehicle which has been damaged 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 undergo an inspection at a State inspection facility.

(b) As a prerequisite to the issuance of a certificate of ownership, a salvage motor vehicle which is a recovered stolen vehicle with a missing, altered or damaged vehicle identification number or plate must undergo an inspection at a State inspection facility.

(c) As a prerequisite to the issuance of a certificate of ownership, the owner of a salvage motor vehicle which is a recovered stolen vehicle that does not have a missing, altered or damaged vehicle identification number or plate and which has not been damaged to such an extent that it has been rendered economically impractical to repair shall supply the Commission with a copy of the report from the law enforcement agency which recovered the stolen motor vehicle to confirm that the vehicle has been inspected to ascertain ownership, together with the other documents required by N.J.A.C. 13:21-22.14.

(d) Upon receipt of the completed application, together with the required inspection fee, if any, the Commission shall mail a notice of appointment to the owner indicating the date, time and place of the inspection.

(e) The following fees, payable to the Commission, shall be charged to inspect the following salvage motor vehicles:

1. For a stolen motor vehicle (including a stolen motorcycle) that is subsequently recovered with a missing, altered or damaged vehicle identification number or plate, there is no fee.

2. For a motor vehicle (other than a motorcycle) that was previously determined to be economically impractical to repair, including a stolen motor vehicle that is recovered in such condition, and that is subsequently reconstructed, rebuilt or repaired, the fee is $200.00.

3. For a motorcycle that was previously determined to be economically impractical to repair, including a stolen motorcycle that is recovered in such condition, and that is subsequently reconstructed, rebuilt or repaired, the fee is $100.00.

(f) An inspection appointment shall be rescheduled at no additional cost provided that the owner notifies the Commission at least five days prior to his or her scheduled inspection date that he or she is unable to have his or her salvage motor vehicle inspected on such date. In the event that the owner fails to provide the Commission with at least five days notice of his or her inability to have his or her salvage motor vehicle inspected on the scheduled inspection date, then the owner must submit an additional inspection fee equal to the amount of the original inspection fee to the Commission before a new inspection appointment will be issued to the owner to have his or her salvage motor vehicle inspected.

13:21-22.11 Temporary registration for salvage motor vehicles

(a) Owners of salvage motor vehicles may apply for a temporary registration in accordance with this section.

(b) After receiving a notice of appointment in accordance with N.J.A.C. 13:21-22.10, the owner may apply for a temporary registration.

(c) A temporary registration for a salvage motor vehicle may be obtained from any motor vehicle agency no sooner than five days before the scheduled appointment date.

(d) The following documents must be presented at a motor vehicle agency before a temporary registration will be issued to the owner:

1. Notice of appointment in accordance with N.J.A.C. 13:21-22.10;

2. Salvage certificate of title; and

3. Proof of current liability insurance coverage.

(e) If the motor vehicle was reported stolen and was subsequently recovered, then the owner must also present a copy of the report from the law enforcement agency which recovered the stolen motor vehicle.

(f) No temporary registration shall be issued unless the owner presents proof of current liability insurance coverage as required by N.J.S.A. 39:6B-1 and/or N.J.S.A. 39:6A-3. An insurance identification card or a photocopy of the declaration page of the insurance policy for that vehicle shall constitute proof of current liability insurance coverage.

(g) A temporary registration issued to owners of salvage motor vehicles shall only be valid for a period of five days.

(h) A fee of $5.00 shall be charged for the issuance of a temporary registration issued to owners in accordance with this section.

13:21-22.12 Grounds for failing State inspection

(a) No vehicle identification number verification form or inspection report shall be issued if it is determined upon inspection that:

1. The salvage motor vehicle is a stolen motor vehicle;

2. The salvage motor vehicle contains a stolen major component part; or

3. The salvage motor vehicle, or a major component part thereof, displays the identification number or plate of a stolen motor vehicle.

(b) The vehicle identification number verification forms and inspection reports referred to in (a) above are not public records and are not accessible for public examination pursuant to the Open Public Records Act, N.J.S.A. 47:1A-1 et seq.

13:21-22.13 Seizure of a salvage motor vehicle

(a) Members of the State and/or local law enforcement agencies shall seize and confiscate a salvage motor vehicle in the following circumstances:

1. Where the motor vehicle, or a major component part thereof, is determined to be stolen; and/or

2. Where the motor vehicle, or a major component part thereof, displays the identification number or plate of a stolen motor vehicle.

(b) The Chief Administrator may also designate employees of the Commission to seize and confiscate salvage motor vehicles as set forth in (a) above.

(c) The State or local law enforcement agency seizing a salvage motor vehicle shall retain custody of the vehicle, pending prosecution of any person arrested in connection with the seizure. The police shall retain custody of the vehicle until the ownership has been ascertained.

(d) Whenever a salvage vehicle is seized pursuant to this section, the law enforcement agency seizing the vehicle or part shall notify the owner of record for the vehicle, any person holding a security interest of record for the vehicle, any other person claiming an interest in the vehicle, and the person from whom the vehicle or part was seized. This notice shall be in writing and shall be served in person or by certified or registered mail, return receipt requested, to the last known address of the person to whom the notice is given within five days after the seizure. If the notice is unclaimed by the addressee or if the address of the person to whom the notice is to be given is unknown to the agency giving notice and cannot be ascertained from the records on file with the Commission, then notice shall be given by publication twice in a newspaper circulating in the county where the vehicle or part was seized, once in each of two consecutive weeks, and by posting in five public places in this State designated by the Chief Administrator. The notice shall describe the vehicle or part, state that it has been recovered, where it is located, and that it will be turned over to the named owner of record, unless an objection in writing is received by the Commission within 10 days of the receipt or (where applicable) publication of the notice. The notice shall also advise that if no objection is timely filed and the vehicle or part remains unclaimed for a period of 90 days, the agency which seized the vehicle or part may sell the vehicle or part forthwith at auction in a public place as an abandoned vehicle. No vehicle or part shall be surrendered to an owner or other party or sold until the appropriate identification number has been affixed by the Commission as necessary, nor where the vehicle is required as evidence in connection with a prosecution.

(e) Any objection filed pursuant to (d) above shall identify the person claiming an interest in the salvage vehicle or part, shall set forth in detail the facts upon which the claim is based, and shall provide copies of all documents supporting the claim, including invoices, bills of sale, and title papers.

(f) Upon sale of a salvage vehicle or part pursuant to this section all claims for interest shall be forever barred and the proceeds realized therefrom, after the payment of the expenses of possession and sale, shall become the sole property of the public entity seizing the vehicle and shall be remitted to the treasury of that public entity.

(g) Unless the Chief Administrator determines to hear a case personally when an objection has been filed with the Commission pursuant to this section, hearings on objections shall be conducted, in accordance with the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1, by the Office of Administrative Law. At the hearings, the burden shall be on the agency that seized the salvage vehicle or part to prove that the vehicle or part was stolen. Thereafter, the burden shall be on the person objecting to prove that the vehicle or part was not stolen and to prove that he or she has a rightful interest in the vehicle or part.

(h) Where inspection discloses that only a major component part is stolen, the owner of the salvage vehicle shall be provided the following options:

1. Seizure of the entire vehicle;

2. Seizure of only the major component part(s) that are determined to be stolen, provided the owner of the salvage vehicle has made arrangements, acceptable to the Commission, to have that major component part removed from the vehicle. The owner shall bear any cost of removing the part; or

3. Any other equitable method of restoring the salvage vehicle and/or major component parts that are not stolen to the owner agreed upon by the owner and the Commission.

(i) A copy of N.J.A.C. 13:21-22 shall be given to every person applying to the Commission for an appointment for inspection of a salvage motor vehicle.

(j) When a salvage motor vehicle seized pursuant to (h)1 above is sold pursuant to (d) above, the owner of the salvage motor vehicle shall receive that portion of the purchase price representing the fair market value of the vehicle minus the fair market value of the stolen major component part.

13:21-22.14 Issuance of certificates of ownership without a salvage designation

(a) A certificate of ownership without a salvage designation shall be issued to the owner (or, if the motor vehicle is owned subject to a lien, a certificate of ownership without a salvage designation shall be issued in the name of the vehicle owner and shall be delivered to the lienholder of record) of the following motor vehicles:

1. A stolen motor vehicle that is subsequently recovered and which has not sustained damage to such an extent that it has been rendered economically impractical to repair, provided that the recovered stolen motor vehicle does not have a missing, altered or damaged vehicle identification number or plate.

2. A stolen motor vehicle that is subsequently recovered with a missing, altered or damaged vehicle identification number or plate after determination at a State inspection that such recovered motor vehicle is not a stolen motor vehicle, provided such vehicle has not sustained damage to such an extent that it has been rendered economically impractical to repair.

(b) No certificate of ownership without a salvage designation shall be issued unless the following documents are presented to the Commission:

1. Salvage certificate of title;

2. Copy of the report from the law enforcement agency which recovered the stolen motor vehicle; and

3. For vehicles described in (a)2 above, a vehicle identification number verification form or inspection report.

(c) A fee, as set forth in N.J.A.C. 13:21-4.2, shall be charged for the issuance of a certificate of ownership without a salvage designation.

13:21-22.15 Issuance of certificates of ownership with a salvage designation

(a) A certificate of ownership with a salvage designation shall be issued to the owner (or, if the motor vehicle is owned subject to a lien, a certificate of ownership with a salvage designation shall be issued in the name of the vehicle owner and shall be delivered to the lienholder of record) of the following salvage motor vehicles:

1. A motor vehicle that was previously determined to be economically impractical to repair and that is subsequently reconstructed, rebuilt or repaired.

2. A stolen motor vehicle that is recovered in damaged condition (for example, stripped for major component parts) and that is subsequently reconstructed, rebuilt or repaired where the cost to repair the 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 stolen.

(b) No certificate of ownership with a salvage designation shall be issued unless the following documents are presented to the Commission:

1. Salvage certificate of title;

2. Inspection report; and

3. For vehicles described in (a)2 above, a copy of the report from the law enforcement agency which recovered the stolen motor vehicle.

(c) A unique vehicle identification number shall be assigned by the Commission to a motor vehicle that is reconstructed, rebuilt or repaired from more than one salvage motor vehicle.

(d) A fee, as set forth in N.J.A.C. 13:21-4.2, shall be charged for the issuance of a certificate of ownership with a salvage designation.

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.

13:21-22.17 Written notice

(a) Any person who transfers ownership of a salvage motor vehicle in violation of N.J.S.A. 39:10-31 et seq. and/or this subchapter shall be notified by the Chief Administrator, in writing by registered mail, of any license suspension or revocation or other action sought to be imposed and the grounds thereof.

(b) Written notice shall be mailed to the person at the address of record with the Commission.

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Disclaimer

While this page gives some general background information, there is the danger that relying on this information alone could lead you to lose your claim. Laws and regulations frequently change and the law may have changed since the posting of this webpage. Factual differences between your case and cases described on this webpage can affect your chance of success. Don’t attempt to rely on the internet as the only source of information for your claim! Instead, get competent legal advice from a New Jersey licensed attorney. Call Perlman DePetris Consumer Law for a no obligation phone consultation.