A salvage auto title does not cover a vehicle that has been reported stolen, and thus known to have salvage title theft. If a vehicle has been reported stolen and it has not yet been sold, the vehicle is still covered by what is known as the Certificate of Origin, and the manufacturer is responsible for the vehicle. Once the vehicle is insured, if it is stolen, the assumption is that it is gone. It is assumed the vehicle will not be back, and if someone does try to title it with a salvage title, alarm bells will sound that some sort of fraud is possibly occurring. If a car is stolen it cannot be titled.
For more info, see How to Buy a Salvage Title Vehicle