Buying a rebuilt car title can be a tricky process. There are many variables to consider, and it’s important that you understand the risks before making your purchase.
Find out how cars with salvage titles and rebuilt titles differ and what you need to know if you plan to purchase a vehicle with a rebuilt title.
- The meaning of a rebuilt title or salvage title varies depending on your state.
- Most states require the vehicle to undergo inspection before it can return to the road.
- Before buying a car with a rebuilt title, check if your insurance company will cover it.
- Many auto insurance providers don’t offer insurance for vehicles with rebuilt titles.
What is a rebuilt title?
A “rebuilt title” is a rebuilt or reconstructed vehicle that an insurance company previously designated as a total loss, usually due to an accident. A rebuilt title might be given to a car that has been subsequently repaired and restored to operation.
These vehicles are often severely damaged before they are rebuilt, and refurbished parts may be used during reconstruction. In most states, an inspection is required before the vehicle is allowed to return to the road.
Rebuilt title vs. salvage title
Normally, a car becomes a salvage vehicle after an insurance company declares it a total loss after an auto accident. The total loss threshold, or formula used to determine if a car is totaled, varies by state.
Generally, a salvage vehicle cannot be driven on the highways or have a valid license plate. It must be repaired to become a rebuilt, roadworthy vehicle.
If a car with an old salvage title is repaired, it will be given a rebuilt title. However, it must be inspected before being deemed safe for the road. Once it passes the safety test, it can be considered a roadworthy vehicle.
| Salvage title | Rebuilt title |
|---|---|
| Generally not roadworthy; significant damage. | Restored to a roadworthy condition after repairs. |
| Often difficult or impossible to insure. | Usually insurable, but rates may be higher than for a clean-titled car. |
| Significantly lower resale value compared to clean-titled vehicles | Higher resale value than salvage titles, but still lower than vehicles with clean titles. |
| No inspection required; considered a total loss. | Must pass a state inspection to confirm repairs and safety. |
How does a car get a rebuilt title?
Sometimes, a salvage vehicle is sold to a third party that either repairs or dismantles it. If the salvage vehicle is repaired, it is then given a rebuilt title. It usually undergoes inspection before the vehicle is permitted to go back on the road.
Should I buy a car with a rebuilt title?
It’s always dicey to buy a car with a rebuilt title, as it comes with its own set of risks. You never know what you’ll get, and it could cost much more than buying a vehicle with a clean title.
However, if everything goes well and nothing terrible happens along the way, buying a car with a rebuilt title can prove to be a good investment, as it might be much cheaper than buying a vehicle without a rebuilt title.
Pros and cons of buying a car with a rebuilt title
Buying a car with a rebuilt title might not be a bad idea. It has its pros and cons and some of them are mentioned below:
Pros:
- Costs less: A rebuilt-title car costs much less than a car of the same model with a clean title.
- Manageable damages: The car may have repairable damages, and if you have enough money in savings and are willing to put up with an old car that’s structurally sound, it might be worth a shot.
- Affordable temporary solution: If you need a car for a short period and are not willing to invest a good sum of money in buying a new car, the one with the rebuilt title can be a helpful temporary solution.
Cons:
- Possible hidden damage: It may have hidden damages that weren’t apparent during the initial inspection. Things can go wrong with a vehicle, even if it appears perfect on paper and in person.
- Difficulty in getting insurance for rebuilt title: A rebuilt title can make it difficult to get insurance.
- Not easy to sell: You may have difficulty selling your car with a rebuilt title. Even if you succeed in selling it, you may not be able to get much money for it.
How much does a rebuilt title affect value?
According to KBB, a car with a salvage title is typically worth 20% to 40% of the Kelley Blue Book Value. However, the exact price of a vehicle with a rebuilt title will depend on many factors, including the model and the kind of damage it sustained.
Learn about the values of vehicles with rebuilt titles vs. clean titles
Can you get insurance for a rebuilt title car?
You can get rebuilt title insurance, but it is tough to find insurance carriers to cover cars with a rebuilt salvage title. Insurance companies often charge rebuilt title vehicle owners with higher premiums than for the same coverage on a vehicle with a clean title.
Can you get full coverage on a car with a rebuilt title?
It is possible to get full coverage insurance for a rebuilt vehicle, but only a few insurers will issue full coverage for a rebuilt car title.
Insurance providers only offer liability coverage to vehicles with a rebuilt title, so you will unlikely find an insurer that will also include comprehensive or collision coverage on the policy. But if you’re willing to do a little research, perhaps you will find something.
Things to keep in mind when buying a car with a rebuilt title
When considering the purchase of a car with a rebuilt title, it’s important to keep the following things in mind:
- Understand what a rebuilt title is: A rebuilt title indicates that the vehicle was previously declared a total loss by an insurance company but has been repaired and inspected to ensure it meets safety standards.
- Research the vehicle’s history: Use services like Carfax or AutoCheck to get the vehicle’s history report. This report can provide details about past accidents and repairs.
- Get a professional inspection: Before purchasing, have the car inspected by a trusted mechanic. They can assess the quality of repairs and identify any underlying issues.
- Check state laws: Different states have varying laws regarding rebuilt titles. Make sure you understand what’s required in your state for registration, insurance and inspections.
- Consider the resale value: Vehicles with rebuilt titles often have lower resale values than cars with clean titles. Be prepared for difficulty selling the car in the future.
- Insurance considerations: Some insurance companies may refuse coverage or offer limited options for rebuilt title vehicles. Check with your insurer to understand the available coverage options and costs.
- Evaluate your purpose: Consider why you are buying the vehicle. A rebuilt title car may be suitable for a short period. However, you may want to reconsider if you want a long-term investment.
Some sellers may try to hide the vehicle’s history. Be cautious and verify all claims the seller makes regarding the car’s condition and history.
Guidelines for rebuilt vehicles vary
In many states, if the vehicle is restored, it must be inspected. Upon passing such an inspection, the state’s Department of Motor Vehicles (DMV) issues a “rebuilt title.”
A reconstructed vehicle with a rebuilt title can be driven on the highways. The guidelines for getting a rebuilt title vary by state.
For example, the state of Florida requires a vehicle to have a salvage title if the insurance company declares the vehicle a total loss.
In some other states, the vehicle’s title is “brand” or marked when the estimate of damages reaches a certain percentage of the vehicle’s retail value. For example, it is 75% in New York. The vehicle also might have to meet other requirements before it gets this brand.
The rules can be complex for rebuilt and salvage vehicles.
For example, the Georgia Department of Revenue notes that anyone who purchases a salvage or wrecked motor vehicle to restore or rebuild it must be licensed as a rebuilder.
Before purchasing a rebuilt vehicle, it should be thoroughly checked out by your mechanic. You also should check to see if the car can be insured with your current insurer since the insurer’s underwriting rules might preclude them from writing policies for cars with salvage or rebuilt titles.
Many auto insurance carriers simply don’t offer policies for rebuilt cars. Or, if a policy is offered, it may be only for liability coverage. Types of car insurance such as collision and comprehensive coverages might not be available because it’s too difficult to determine a rebuilt car’s true value.
If you purchase a vehicle with a rebuilt title, you’ll have to shop around and compare car insurance rates to find the right car insurance company for your needs. Look for insurers that allow full coverage on cars with branded titles.
Our guide on how to insure a rebuilt title car provides more details on getting coverage and on companies that sell insurance for rebuilt title cars.
The bottom line
Before purchasing a rebuilt title vehicle, ensure you get a detailed repair report. It can provide insight into the quality of repairs and potential future issues.
Insuring a rebuilt title car can be more challenging. Many insurance companies may offer limited coverage options or higher premiums due to the vehicle’s history. It’s important to look for insurers willing to cover rebuilt title vehicles.
FAQs: Rebuilt car title
Can you sell a car with a rebuilt title?
Yes, you can sell a car with a rebuilt title. However, it may be more challenging to find a buyer, as vehicles with rebuilt titles are perceived as less reliable and are often worth less than those with clean titles. It’s important to be transparent about the title status and provide any documents that show the repairs and safety inspections completed.
Why is it difficult to insure a vehicle with a rebuilt title?
Insuring a vehicle with a rebuilt title can be difficult because these cars have previously sustained significant damage, which raises concerns about their safety and reliability. Insurance companies often view rebuilt vehicles as high-risk due to potential hidden damage or a reduced resale value. As a result, many insurers may only offer liability coverage or charge higher premiums for a full coverage policy.
How can you verify if a rebuilt car is safe to drive?
To verify if a rebuilt car is safe to drive, check if it has passed a safety inspection, which varies by state. This inspection usually confirms that the necessary repairs have been made and that the vehicle meets safety standards. You can also request a pre-purchase inspection from a trusted mechanic who can assess the car’s condition and ensure that the vehicle functions properly.
Can a rebuilt title be changed back to a clean title?
A rebuilt title cannot be changed back to a clean title. Once a vehicle is issued a rebuilt title, it signifies that it has been previously declared a total loss but has been repaired and inspected to meet safety standards.
Sources
- Kelley Blue Book. “Frequently Asked Questions.” Accessed November 2024.
- Florida Department of Highway Safety and Motor Vehicles. “Application for salvage title/certificate of destruction.” Accessed November 2024.
- Georgia Department of Revenue. “Titles for Rebuilt or Restored Vehicles.” Accessed November 2024.
- New York State Department of Motor Vehicles. “Salvage branding of New York State registered vehicles.” Accessed November 2024.
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