When purchasing a used car, you may need to compromise on mileage, color, and condition.
Sometimes if an deal appears too good to be true, it’s for a reason. Under these circumstances, it could be that you’ve found a car with a rebuilt title. So do you negotiate like you usually would or just walk away?
The first thing is understanding the difference between a rebuilt title versus a salvage title. If a vehicle has a rebuilt title, it had a salvage title before based on a wreck, fire, flood, or some other major form of destruction, but it has been rebuilt by a mechanic and should be roadworthy.
We want to help you be an informed buyer, as you gain more information on a rebuilt title car and related topics!
What Does Rebuilt Title Mean?
When a car gets a rebuilt title, it means the insurance company declared it a totaled vehicle and assigned a salvage title to it. If a car with a salvage title is repaired to a roadworthy condition, the car is inspected and the title updated to roadworthy.
Usually, the only appealing characteristic of a rebuilt title car is lower price. Like a wrecked vehicle with a carfax from an accident, it is less appealing to buyers, and therefore is worth less money.
So is a rebuilt title bad? As you will see below, the cons outweigh the pros when buying a rebuilt title vehicle. Unless you know what you are getting into, it is better to not buy cars with a rebuilt title. To learn more about all sections of car’s history, it is always best to run a carfax.
What Does Rebuilt Title Mean in My State?
A rebuilt title may mean different things in all states. As such, it is always in your best interest to check with your auto insurance company about what the laws say.
You can even go as far as calling state officials and getting their definition of a rebuilt title.
Here are some definitions in various states for a rebuilt title.
What Is Rebuilt Title Texas?
In Texas, the Department of Motor Vehicles issues vehicle titles. In the state of Texas, a rebuilt title was once a salvage title.
It means the vehicle was damaged, was not drivable or roadworthy, due to a flood, accident, crash or wreck. The state of Texas considers a rebuilt title a vehicle that can pass the required safety inspections and anti-theft inspections.
What About Rebuilt Title in California?
A rebuilt title is a term used by the California DMV. A rebuilt or salvage title is a vehicle that was previously wrecked or damaged to the extent that repair costs are too high.
California DMV terms include “revived salvage” car title, which is a vehicle that has been repaired and issued a new registration by California DMV.
What Does Rebuilt Title Mean New York?
According to The New York Department of Motor Vehicles, a salvage vehicle exists when:
- Transferred by an insurance company with a Salvage Certificate due to extensive damage.
- The costs to repair the vehicle exceed 75% of the pre-damaged retail value of the vehicle.
- It had a salvage title issued in another state that had entered New York
- Was deemed a “wreck” as written on the back of the New State title by the owner at the time of sale.
What Does Rebuilt Title Mean Florida?
Florida states a salvage vehicle is a vehicle that has been in an accident, and would cost the owner about 80% of its value for replacement.
In the case of vehicles that are totally damaged and rebuild, the title provides notification of either a rebuilt vehicle or an assembled vehicle from different aggregates and parts through the Florida Department of Motor Vehicles.
You should inquire with your local department of motor vehicles on what a rebuilt title is in your state, for your own protection.
Rebuilt Title vs. Salvage Title
It takes a lot for a totaled car to be operable enough to receive a rebuilt title. When an insurance company declares a car a total loss, they assign a salvage title to it. These vehicles are considered unsafe to operate on public roadways and the salvage title helps alert a potential buyer the vehicle was severely damaged.
Salvaged vehicles are often sold “as is,” with the hope that whoever purchases it will either try to rebuild it or use for parts to repair other vehicles. If a new owner decides to repair the vehicle, they can apply for the rebuilt title through their state’s Department of Motor Vehicles once they complete the necessary repairs.
Some unscrupulous sellers may try to hide the vehicle was totaled by transporting it to another state, repairing it, and applying for a clean title, which is termed “title washing.”
To help reveal the deception, the National Insurance Crime Bureau (NICB) has a free online program called VIN Check that allows potential buyers to search the car’s vehicle identification number (VIN) to see if an insurance company has previously listed it as a total loss.
Pros and Cons of a Rebuilt Title
Although they have been in bad accidents, it is not always a bad idea to buy a vehicle with a rebuilt title. The following are the pros and cons, starting with the pros:
Pros of Buying a Vehicle with a Rebuilt Title
- The cost is a lot less. A vehicle with a rebuilt title should be much less than a clean similar vehicle.
- The damage may not be that bad. There are many reasons why cars can be considered a total loss. If the rebuilt car is structurally sound but because of some expensive new parts that needed to be replaced that the insurance company was not going to pay for, you may be okay. But if the vehicle had more serious damage, such as a bent or cracked frame, you could be taking a gamble that isn’t worth taking. Make sure you ask why the vehicle had to be rebuilt and what exactly was done to make repairs, and also check the VIN at the NICB site. If you are not an auto expert yourself, you might consider paying a reputable mechanic to check it out for you.
Cons of Buying a Vehicle with a Rebuilt Title
- Past damage can come back to hurt you! Even if you really took your time inspecting a vehicle before closing the deal, remember that cars are very complex machines, and anything could possibly go wrong. They may have fixed any mechanical issues they could possibly find, but that still could lead to hundreds or thousands of dollars in repairs. One type of damage to be especially careful of is something like flooding. You may not be able to see the evidence, but this type of damage will create bigger problems for you as the metals are going to corrode;
- It could be difficult to insure. Your vehicle could be in pristine shape, but a rebuilt title could be a danger flag to some insurance companies. However, some insurance companies in this situation will not sell you collision or comprehensive insurance, which is insurance that would cover the damage to your own car, but they will sell you liability insurance to cover damages you may cause to other people or their property. Liability insurance coverage is required in almost every state; collision and comprehensive coverage are optional coverage purchases;
- It may be hard to sell. When you have finally decided to let go of the vehicle or have decided to trade up, the rebuilt title may turn off a lot of potential buyers.
What Is A Rebuilt Title for a Car? Will That Make the Car a “Bad” Car?
The short answer to this question is no. Cars with a rebuilt title are not “bad” cars. There are many good cars with a rebuilt title for many reasons.
One example of a reason why a rebuilt title car is a good car is due to its price. Many times, the price you pay for a car with a rebuilt title is hundreds of dollars cheaper.
However, there are some negatives. One negative aspect about a car with a rebuilt title is you may have a hard time selling it when you require a new vehicle. Many independent car dealers will not take salvage or rebuilt title cars for trade-in.
If you do find a dealer that does take salvage and rebuilt title cars, you will receive much less than the Kelley Blue Book value for that car. Therefore, it may be wise to sell the car privately and let the buyer know you have a rebuilt title car or salvage title car.
What Does a Rebuilt Title Mean for Insurance?
Now that you know what a rebuilt title is; a previously salvage title car that has been repaired, what does it mean for insurance?
Although your rebuilt title car is safe to drive, not all car insurance companies will rush to give your rebuilt title car coverage.
Many insurance companies will not offer coverage for a rebuilt title vehicle. For those companies that do offer coverage, they will recommend tests the car should undergo.
Some insurance policies do offer some kind of coverage for a rebuilt title car, but more than likely, the car will not be eligible for collision or comprehensive insurance coverage.
With a salvage title, there is no option for car insurance. A salvage car title means the car has been deemed a total loss, and too dangerous to operate.
Should I Stay Away from Cars with a Rebuilt Title?
As a rule of thumb, you should avoid cars with a rebuilt car title. Although a rebuilt car title states that the car is safe, there are many pitfalls to this car.
For example, your rebuilt title car could be running well for a few months, and then you may begin observing some problems later.
If you are a mechanic and want a car with good parts, then buying a rebuilt title car may be in your favor. Even if you have a small business that sells car parts, to buy a car with a rebuilt car title may work to your benefit.
Rebuilt or salvage cars may be lower cost or cost-effective vehicles, but it is important you know what car you are looking at regardless of your purpose.