Michigan State Title Processing Procedures

1. What form of title must an insurer obtain in connection with the sale of a vehicle that has been acquired through the settlement of a claim?
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title (“clean”)?
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Flood Vehicle Certificate of Title (“clean flood”)?
4. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Title?
5. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Flood Vehicle Certificate of Title?
6. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Title?
7. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Flood Vehicle Certificate of Title?
8. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Flood Vehicle Certificate of Title?
9. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Flood Vehicle Certificate of Title?
10. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Flood Vehicle Certificate of Title?

1. What form of title must an insurer obtain in connection with the sale of a vehicle that has been acquired through the settlement of a claim?
   
   Except for a late model vehicle that has been stolen and recovered and that has no major component part removed, missing, or destroyed, or damaged and not salvageable, an insurance company licensed to conduct business in this state that acquires ownership of a late model vehicle through the payment of a claim shall proceed under either of the following: (a) If the insurance company acquires ownership of the vehicle through payment of a claim, the owner of the vehicle shall assign the certificate of title to the insurance company which shall do all of the following: (i) Surrender a properly assigned certificate of title to the secretary of state. (ii) If the estimated cost of repair, including parts and labor, is equal to or more than 75% but less than 91% of the predamaged actual cash value of the vehicle, apply for a salvage certificate of title, and if the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title. The insurance company shall not sell the vehicle without first receiving a salvage or scrap certificate of title, which shall be assigned to the buyer. An insurance company may assign a salvage or scrap certificate of the title only to an automotive recycler, used or secondhand vehicle parts dealer, foreign salvage vehicle dealer, or vehicle scrap metal processor. [Michigan Vehicle Code § 257.217c(2)]
   
   If an insurance company acquires ownership of a vehicle other than a late model vehicle through payment of damages due to an accident, the company shall surrender a properly assigned title to the buyer upon delivery. [Michigan Vehicle Code § 257.217c(3)]
   
   If a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity, owns a distressed, late model vehicle, the titleholder shall surrender the title or assigned certificate of title to the secretary of state and apply for a salvage certificate of title if the retail cost of repair, including parts and labor, is equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle, or if the retail cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, apply for a scrap certificate of title, before the vehicle may be transported or sold. If ownership is transferred, the owner shall sell the vehicle only to a dealer who is eligible to buy a salvage or scrap vehicle in this state unless the owner complies with subsection (12). When a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity, estimates the repair of a distressed, late model vehicle for the purpose of determining whether to apply for a salvage or scrap certificate of title, a complete record of the estimate and, if the vehicle is repaired before a transfer of ownership, a complete record of the actual cost of the repairs performed and by whom shall be maintained for a minimum of 5 years by the leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity. The estimates and repair records required by this subsection shall be available for unannounced inspections by a law enforcement agency or a representative of the secretary of state. The secretary of state may request a leasing company, vehicle manufacturer, insurance company not licensed to do business in this state, association, repossession company, self-insured owner, financial institution, governmental entity, or other company, institution, or entity to provide copies of title documents, repair estimates, claims reports involving major component parts, and actual cash value determination documents to assist the secretary of state in monitoring compliance with this act. [Michigan Vehicle Code §257.217c(9)]
   
   The following definitions apply to the above legal citations:
   
   "Distressed vehicle" means a vehicle that has a major component part that has been wrecked, destroyed, damaged, stolen, or missing to the extent that the total estimated cost of repairs to rebuild or reconstruct the vehicle, including parts and labor, is equal to or exceeds 75% of the actual cash value of the vehicle in its predamaged condition. The estimated costs of the repair parts shall be determined by using the current published retail cost of original manufacturer equipment parts or an estimate of the actual cost of the repair parts. The estimated labor costs shall be computed by using the hourly rate and time allocations which are reasonable and commonly assessed in the repair industry in the community where the repairs are performed. For the purpose of this section, "actual cash value" means the retail dollar value of a vehicle as determined by an objective vehicle evaluation using local market resources such as dealers or want ads or by an independent vehicle evaluation or appraisal service or by a current issue of a nationally recognized used vehicle guide for financial institution appraisal purposes in this state. [Michigan Vehicle Code § 257.12a]
   
   "Late model vehicle" means a vehicle weighing 8,000 pounds or less, manufactured in the current model year or the 5 model years immediately preceding the current model year, or, if over 8,000 pounds, a vehicle manufactured in the current model year or the 15 model years immediately preceding the current model year. [Michigan Vehicle Code § 257.24b]
   
   "Major component part" means 1 of the following parts of a vehicle:
   
   
   (a) The engine.
   (b) The transmission.
   (c) The right or left front fender.
   (d) The hood.
   (e) A door allowing entrance to or egress from the vehicle's passenger compartment of the vehicle.
   (f) The front or rear bumper.
   (g) The right or left rear quarter panel.
   (h) The deck lid, tailgate, or hatchback.
   (i) The trunk floor pan.
   (j) The cargo box of a pickup.
   (k) The frame, or if the vehicle has a unitized body, the supporting structure or structures that serve as the frame.
   (l) The cab of a truck.
   (m) The body of a passenger vehicle. [Michigan Vehicle Code § 257.27a]
   
   "Flood vehicle" means a vehicle that was submerged in water to the point that water entered the passenger compartment or trunk over the sill of the trunk floor pan or doorsill or a vehicle acquired by an insurance company as part of the settlement of a water damage claim. [Michigan Vehicle Code § 257.17c]
   
   Note: A clean flood, salvage flood, or scrap flood title can be issued depending upon damage. back to top
   
   
2. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Certificate of Title to the purchaser. [Michigan Vehicle Code § 257.217c]
   
   Note: In Michigan, five (5) re-assignments of title are allowed for dealers before you have to apply to the Secretary of State for a new title. back to top
   
   
3. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Flood Vehicle Certificate of Title (“clean flood”)?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Flood Vehicle Certificate of Title to the purchaser. [Michigan Vehicle Code §§ 257.217c and 257.17c] back to top
   
   
4. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for an Original Michigan Salvage Title (TR-12) and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Certificate of Title for Salvage Vehicle in the name of the insurer.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Certificate of Title for Salvage Vehicle to the purchaser. [Michigan Vehicle Code § 257.217c] back to top
   
   
5. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Salvage Flood Vehicle Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for an Original Michigan Salvage Title (TR-12) and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Salvage Flood Vehicle Certificate of Title in the name of the insurer.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Salvage Flood Vehicle Certificate of Title to the purchaser. [Michigan Vehicle Code §§ 257.17c and 257.217c(b)] back to top
   
   
6. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for an Original Michigan Scrap Title (TR-12) and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Scrap Certificate of Title in the name of the insurer.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Scrap Certificate of Title to the purchaser. [Michigan Vehicle Code § 257.217c] back to top
   
   
7. What documents must an insurer provide to CarBuyerUSA in order to sell a vehicle on a Scrap Flood Vehicle Certificate of Title?
   
   The insurer shall provide CarBuyerUSA with a Certificate of Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement, a release of any liens, an ACV, and a cost of repair.
   
   CarBuyerUSA will submit these documents along with an Application for an Original Michigan Scrap Title (TR-12) and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Scrap Flood Vehicle Certificate of Title in the name of the insurer.
   
   CarBuyerUSA, acting under a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Scrap Flood Vehicle Certificate of Title to the purchaser. [Michigan Vehicle Code §§ 257.17c and 257.217c(b)] back to top
   
   
8. What documents must an insurer provide to CarBuyerUSA in order to sell a recovered theft vehicle recovered substantially intact with no substantial damage, where title is still in the name of the insured?
   
   When a vehicle has been stolen, the insurer shall provide CarBuyerUSA with a Title or a comparable ownership document issued by another state or jurisdiction (either endorsed over to the insurer by insured or endorsed by insurer accompanied by a power of attorney from insured to insurer and CarBuyerUSA), an odometer disclosure statement with last known mileage, and a release of any liens.
   
   After receipt of these documents, CarBuyerUSA will submit these documents along with an Application for an Original Michigan Title (TR-11) and the appropriate fee to the Secretary of State for processing.
   
   Thereafter, the Secretary of State shall issue a Certificate of Title in the name of the insurer. Upon receipt, CarBuyerUSA will forward the Certificate of Title to the insurer for safekeeping.
   
   If the vehicle is recovered, the Title along with an ACV and a cost of repair will be returned to CarBuyerUSA by the insurer in order to obtain the appropriate title depending upon the year and damage to the vehicle. However, if one or more component parts are nonsalvageable, regardless of the percentage of damage, a Certificate of Title for Salvage Vehicle is required on a recovered theft vehicle only.
   
   CarBuyerUSA, acting upon a power of attorney for the insurer, will then sell the vehicle at auction and reassign the insurer’s Title to the purchaser. back to top
   
   
9. What steps must an insurer take in Michigan to process an ownerretained vehicle?
   
   Pursuant to Michigan Vehicle Code § 257.217c(2)(b):
   
   
   Except for a late model vehicle that has been stolen and recovered and that has no major component part removed, missing, or destroyed, or damaged and not salvageable, an insurance company licensed to conduct business in this state that acquires ownership of a late model vehicle through the payment of a claim shall proceed under either of the following:
   
   
   (b) If after payment of a total loss claim the insurance company permits the owner of the vehicle to retain ownership, the insurance company shall do all of the following:
   
   
   (i) If the estimated cost of repair, including parts and labor, is equal to or greater than 75% but less than 91% of the predamaged actual cash value of the vehicle, require each owner of the vehicle to sign an application for a salvage certificate of title, or if the estimated cost of repair, including parts and labor, is equal to or greater than 91% of the predamaged actual cash value of the vehicle, require each owner of the vehicle to sign an application for a scrap vehicle certificate of title.
   
   (ii) Attach the owner's certificate of title to the application for a salvage or scrap certificate of title or have the owner certify that the certificate of title is lost.
   
   (iii) On behalf of the owner, apply to the secretary of state for a salvage or scrap certificate of title in the name of the owner. The owner shall not sell or otherwise dispose of the vehicle without first receiving a salvage or scrap certificate of title, which shall be assigned to the buyer. An insurance company may assign a salvage or scrap certificate of title only to an automotive recycler, used or secondhand vehicle parts dealer, foreign salvage vehicle dealer, or vehicle scrap metal processor. back to top
   
   
10. What legal duties are imposed upon a lienholder following satisfaction of the lien?
    
    Pursuant to Michigan Vehicle Code 257.238(c):
    
    
    (1) Whenever there is no outstanding obligation and no commitment to make advances, incur obligations or otherwise give value, secured or to be secured by a security interest in a vehicle, or an accessory thereon, for which the certificate of title is in possession of a secured party, such secured party shall, within 10 days after satisfaction of the obligation and, in any event within 30 days, execute a termination statement in the form prescribed by the department and mail or deliver the termination statement to the owner or such other person as the owner may direct. The owner other than a dealer holding the vehicle for resale, shall promptly cause the certificate, all termination agreements, and an application for certificate of title accompanied by the proper fee, to be mailed or delivered to the department, which shall issue a new certificate.
    
    (2) Whenever there is no outstanding obligation and no commitment to make advances, incur obligations or otherwise give value, secured or to be secured by a security interest in a vehicle, or an accessory thereon, for which the certificate of title is in the possession of another person, the secured party shall within 10 days after demand and in any event within 30 days, execute a termination statement in the form prescribed by the department and mail or deliver the termination statement to the owner or such other person as the owner may direct.
    
    
    Pursuant to Michigan Vehicle Code § 257.239, it is a misdemeanor for any person to fail or neglect to properly endorse and deliver a certificate of title to a transferee or owner lawfully entitled thereto. back to top