Salvage is permissible except for engine and some drivetrain parts. Yard must crush/shred after 180 days. Here"s the pertinent part of the law:
§ 599.401 Requirements and limitations for disposal facilities that receive trade-in vehicles under the CARS program. (a) The disposal facility must: (1) Not more than 7 days after receiving the vehicle, report the vehicle to NMVTIS as a scrap vehicle. (2) Remove and dispose of all refrigerants, antifreeze, lead products, mercury switches, and such other toxic or hazardous vehicle components prior to crushing or shredding in accordance with applicable Federal and State requirements; (3) Crush or shred the trade-in vehicle onsite, including the engine block and the drive train (unless with respect to the drive train, the transmission, drive shaft, and rear end are sold separately), using its own machinery or a mobile crusher, within 180 days after receipt of the vehicle from the dealer or salvage auction; (4) Not more than 7 days after the vehicle is crushed or shredded, report the vehicle to NMVTIS as crushed or shredded. (b) The disposal facility may not sell or transfer the engine block of the vehicle or, except as allowed under paragraph (c)(2) of this section, the drive train before they are crushed or shredded or otherwise allow the vehicle to leave the disposal facility before it is crushed or shredded. (c) The disposal facility may: (1) Sell any part of the vehicle other than the engine block or drive train; (2) Notwithstanding paragraph (c)(1) of this section, sell the drive train provided the transmission, drive shaft, and rear end are sold as separate parts; (3) Retain the proceeds from parts sold under this paragraph.
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