Chapter 9, Section E:
Salvage and Nonrepairable Vehicles

Revised September 8, 2008

Recent changes in statute and rule

Legislation enacted in 2005 and 2007, and rule revisions in 2006, made significant changes in the definitions and procedures to be followed with regard to salvage and nonrepairable vehicles. The relevant sections in statute are 66-1-4.12, 66-1-4.16, 66-3-4, 66-3-10.1 and 66-3-115. The applicable rules can be found in the New Mexico Administrative Code (NMAC) at, and


"Salvage vehicle" means a vehicle:

  1. other than a nonrepairable vehicle, of a type subject to registration that has been wrecked, destroyed or damaged excluding, pursuant to rules issued by the department, hail damage, to the extent that the owner, leasing company, financial institution or the insurance company that insured or is responsible for repair of the vehicle considers it uneconomical to repair the vehicle and that is subsequently not repaired by or for the person who owned the vehicle at the time of the event resulting in damage; or
  2. that was determined to be uneconomical to repair and for which a total loss payment is made by an insurer, whether or not the vehicle is subsequently repaired, if, prior to or upon making payment to the claimant, the insurer obtained the agreement of the claimant to the amount of the total loss settlement and informed the claimant that, pursuant to rules of the department, the title must be branded and submitted to the department for issuance of a salvage certificate of title for the vehicle.

"Nonrepairable vehicle" means a vehicle of a type otherwise subject to registration that:

  1. has no resale value except as a source of parts or scrap metal or that the owner irreversibly designates as a source of parts or scrap metal or for destruction;
  2. has been substantially stripped as a result of theft or is missing all of the bolts on sheet metal body panels, all of the doors and hatches, substantially all of the interior components and substantially all of the grill and light assemblies and has little or no resale value other than its worth as a source of a vehicle identification number that could be used illegally; or
  3. is a substantially burned vehicle that has burned to the extent that there are no more usable or repairable body or interior components, tires and wheels or drive train components or that the owner irreversibly designates for destruction or as having little or no resale value other than its worth as a source of scrap metal or as a source of a vehicle identification number that could be used illegally.

Who determines that a vehicle is salvage or nonrepairable?

By rule, the declaration by an insurance company that a vehicle is a salvage or nonrepairable vehicle makes the vehicle a salvage vehicle or nonrepairable vehicle regardless of the relative amounts of repair costs versus fair market value. And, once a title has been salvage-branded, all subsequent transfers of title must be by salvage-branded title. Once a nonrepairable vehicle certificate has been issued for a vehicle, the motor vehicle division shall not issue further ownership certificates for that vehicle.

Transfer of a salvage or nonrepairable vehicle

It is unlawful for a person to sell or otherwise convey ownership of a salvage or nonrepairable vehicle unless the certificate of title or ownership is branded or a comparable title, certificate or ownership document has been issued by another state or jurisdiction.

An owner of a nonrepairable vehicle shall sell or otherwise convey that vehicle only to a licensed wrecker of vehicles or a person licensed by a jurisdiction outside of this state to process vehicles by dismantling, wrecking, shredding, crushing or selling motor vehicle parts or scrap material or otherwise disposing of motor vehicles.

Insurance company takes title

When an insurance company takes title to a salvage or nonrepairable vehicle, and makes a total loss payment to the vehicle owner, the insurance company must apply for a salvage title or non-repairable certificate in its name before transferring title to the vehicle. The insurance company shall submit the endorsed title or Manufacturer's Certificate of Origin (MCO) to the Motor Vehicle Division, together with a written explanation of the reason for the branding. In the case of a salvage vehicle, a statement must be included of the costs of repair to make the vehicle safe for operation on the highways and the estimate of its fair market value immediately prior to damage. If the title was issued by a jurisdiction other than New Mexico, a copy of the title must be sent to the issuing jurisdiction with a completed “statement of loss.”

Vehicle owner chooses to keep the vehicle

If, however, the vehicle owner chooses to keep the salvage or nonrepairable vehicle and accepts a reduced payout from the insurance company, the transferor shall stamp or otherwise mark in ink the face of the title or MCO with the word “SALVAGE” or “NON-REPAIRABLE” in letters no less than one-half inch high, at an angle of approximately 45 degrees to the text of the title or MCO. The branding shall not cover the portion of the title or MCO which describes the vehicle.

If the vehicle is a non-repairable vehicle, the owner may not transfer ownership to any person who is not a licensed auto recycler.

The transferor shall submit a copy of the branded title or MCO to the motor vehicle division. If the title or MCO had not previously been branded with the word “SALVAGE” or “NON-REPAIRABLE,” the transferor shall submit with the title or MCO a written explanation explaining the reason for the branding.

Sale to and repurchase from insurance company

In situations where an insurance company takes title to a salvage vehicle and the vehicle is bought back from the insurance company by the original owner, taxes and title fees apply.  Clerk will process as a Title change. Vehicle must be branded as “SALVAGE”. Applicant must complete Vehicle Equipment Affirmation. If license plate was damaged issue a new plate and prorate current registration.

Vehicle not the subject of an insurance settlement

If a nonrepairable vehicle is not the subject of an insurance settlement, the owner shall, within 20 days from the date of the loss, forward a properly endorsed certificate of title or MCO, together with the proper fee to the department, and the department shall issue a nonrepairable vehicle certificate for the vehicle.