Salvage

When a car is written off, the insurer pays the insured value and, in exchange, takes ownership of the wreck as salvage, which it sells through salvage channels to recover part of the payout. This is a direct consequence of indemnity: you have been compensated for the loss, so you cannot also keep the asset.

You can usually elect to retain the salvage instead, in which case the insurer deducts the salvage value from your settlement and you keep the wreck. Owners do this to rebuild a Code 3 vehicle or to sell it themselves, but it is rarely worth it once the reduced payout, the rebuild cost and the permanent NaTIS record are weighed up.

Salvage feeds the used-parts and rebuilt-vehicle market, which is why a NaTIS check matters when buying second-hand — a bargain car can be a rebuilt write-off whose history sits in the salvage chain. If you do keep salvage, be clear about the code it will carry and how that limits re-registration and resale.