When it comes to buying a used car, you may have to make compromises on details such as mileage, color, and condition. Often deals that look a bit too good are that way for a reason. In such cases, it is possible that you’ve found a vehicle with a rebuilt title. Should you haggle accordingly or just walk away altogether?
The first thing to know is the difference between a rebuilt title and a salvage title. If a car has a rebuilt title it means it once had a salvage title because of a crash, fire, flooding, or other significant damage, but it has since been rebuilt by a mechanic and should be road-ready.
We hope to make you an informed buyer, as you learn the facts about a rebuilt title car and more!
What Does Rebuilt Title Mean?
If a car is issued a rebuilt title, it means that an insurance company declared it a total loss and issued a salvage title. However, instead of being scrapped, it is repaired to roadworthy condition. After a thorough inspection, the title is updated to reflect its new roadworthiness.
Typically, the only attractive characteristic of a car with a rebuilt title is its lower price. Like a vehicle with accident damage, a vehicle with a rebuilt title is less attractive to buyers and thus is worth less money.
So, is a rebuilt title bad? As you can see below, the cons outweigh the pros when buying a car with a rebuilt title. It’s best to avoid cars with a rebuilt title unless you know what you are getting yourself into. A Carfax Report can help shed light on all parts of a car’s history.
What Is A Rebuilt Title Mean In The State I Live In?
A car with a rebuilt title can have different definitions in each state. It always helps to talk to your car insurance company about laws.
You may even contact state officials to see how a rebuilt title is defined.
Let’s look at some states and their definition of a rebuilt title.
What Is A Rebuilt Title Texas?
In Texas, vehicle titles are issued by the Department of Motor Vehicles. In the Lone Star state, a rebuilt title is a title that was previously a salvage title.
This means that the vehicle was not drivable or roadworthy, because of either a flood, an accident, a crash or a wreck. Texas deems cars with a rebuilt title as a car that can pass all of the required and mandated safety and anti-theft examinations.
What About a Rebuilt Title in California?
According to the California DMV website, a rebuilt or salvage title is defined as a vehicle that was once damaged or wrecked or damaged to the extent that it is now deemed too expensive to repair.
Additionally, California uses the term “revived salvage” car title. This refers to a car or a vehicle which has been repaired and is now reregistered with the California DMV.
What Does the term Rebuilt Title Mean in New York?
According to the New York Department of Motor Vehicles, a salvage vehicle has to meet certain criteria. In order for a car to be salvaged it:
- was transferred by a car insurance company with a Salvage Certificate, due to tremendous damage.
- has costs that are more than 75% of the pre-damage retail value of the car.
- had a salve title from another state and was then brought to New York.
- was deemed a “wreck” and that was noted on the back of New York State title by the owner at the time of sale.
What Does Rebuilt Title Mean in Florida?
Florida law states that a vehicle involved in an accident is a salvage vehicle, if it is estimated that the car will cost 80 percent or more of its value to replace it.
For cars with extensive damage and later restored, the owner of the vehicle has to obtain a rebuilt title from the Florida Department of Motor Vehicles. The title serves as notification to subsequent owners, that the vehicle has been rebuilt or assembled from various elements and parts.
It is to your benefit to check with your local department of motor vehicles to find out what a rebuilt title is in your respective state.
Rebuilt Title vs. Salvage Title
It takes a lot for a totaled car to become operable enough to receive a rebuilt title. When a car is declared a total loss by an insurance company, it gets a salvage title. These vehicles are deemed unsafe to operate on public roads and the salvage title helps warn potential buyers that the vehicle is severely damaged.
Salvage vehicles are typically sold “as is,” with the intention that whoever purchases one will likely either try to rebuild it or use it for parts to repair other vehicles. If it’s the former, the new owner can apply for a rebuilt title from their state department of motor vehicles after repairs are completed.
Some unscrupulous sellers may attempt to hide the fact that a car had been totaled by transporting it to another state, repairing it, and applying for a new, clean title—a process known as “title washing.”
To help combat that deception, the National Insurance Crime Bureau (NICB) offers a free online service called VINCheck that lets prospective purchasers check the car’s vehicle identification number (VIN) to see whether an insurance company has previously reported it as a total loss.
Pros and Cons of a Rebuilt Title
Despite their checkered past, it isn’t always a bad idea to purchase a vehicle with a rebuilt title. Here are some pros and cons, starting with the pros:
Pros of Buying a Vehicle with a Rebuilt Title
- The cost is markedly lower. A car with a rebuilt title should sell for considerably less than a similar model with a clean title will.
- The damage may not be as bad as you thought. There are many possible reasons for a car to be declared a total loss. If the rebuilt car is structurally sound and simply needed some expensive new parts that the insurance company didn’t want to pay for, it may be fine. But if it suffered more severe damage, resulting in, for example, a warped or cracked frame, it could be a gamble that isn’t worth taking. Be sure to ask why the car had to be rebuilt and what was done to fix the damage, and also check the VIN at the NICB site. If you aren’t an automotive expert yourself, consider paying a trustworthy mechanic to look it over for you.
Cons of Buying a Vehicle with a Rebuilt Title
- Past damages can rear their ugly head later. Even if you tried to inspect the car thoroughly before finalizing the transaction, cars are complex machines and things can go wrong. Mechanical issues that appeared to be fixed could cost you hundreds or thousands of dollars in repairs. One type of damage to be especially wary of is flooding, which may not be immediately obvious but can cause major problems as metal corrodes.
- It could be harder to get insurance. Your car might be in tip-top shape, but a rebuilt title can be radioactive to some insurance companies. In some cases, an insurer may refuse to sell you collision or comprehensive insurance, which cover damage to your own car, but will agree to sell you liability insurance, which covers damage you cause to other people or their property. Liability coverage is mandatory for drivers in virtually every state, but collision and comprehensive are optional.
- It may be tough to sell. When you no longer need the vehicle or have decided to trade up, your car’s rebuilt title could scare off 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. Lots of cars with a rebuilt title are good for lots of reasons.
One reason a rebuilt title car is a good car, is its price. Lots of times, a car with a rebuilt title is hundreds of dollars cheaper.
But there are some negatives. One disadvantage to a car with a rebuilt title is the possibility of having a difficult time selling it, when you want another vehicle. Lots of independent car deals will not accept salvage or rebuilt title cars for trade-ins.
If you do find a dealer that does accept those salvage and rebuilt title cars, they will give you far less than the Kelley Blue Book value for that car. Therefore, you might be better off selling the car privately and letting the potential buyer know you have a rebuilt title or salvage title car.
What Is A Rebuilt Title Mean for Insurance Purposes?
Since you already know that a rebuilt title is a vehicle that has previously held a salvage title and has undergone some repairs, what does this mean for insurance?
Even though your rebuilt title is safe to drive, not all car insurance companies will rush to provide you coverage for your rebuilt title car.
Lots of insurance companies will not extend coverage to a rebuilt title vehicle. Those companies that do offer you coverage, will ask that your car undergo some tests.
Additionally, even though you have some sort of coverage for your rebuilt title car, your car will most likely not qualify for collision or comprehensive insurance coverage.
With a salvage title, there is no option for car insurance. A salvage car title indicates that the car has been deemed a total loss. It’s also too dangerous to operate.
Should I Stay Away from Cars with a Rebuilt Title?
As a general rule of thumb, you should stay away from cars with a rebuilt car title. Even though a rebuilt car title states that the car is safe, there are lots of pitfalls with this kind of car.
For example, your rebuilt title car may be running well for a few months, but then you may begin to take note of some issues later.
If you are a mechanic and are looking for a car with great parts, then buying a car with a rebuilt title may be in your best interest. Even if you have a small business in which you sell car parts, buying car with a rebuilt car title may help business.
While a salvaged or rebuilt car are very cheap or cost-effective vehicles, it’s important to know what kind of car you’re looking at, regardless of your purpose for and with it.