A rebuilt title refers to a vehicle that had a salvage title and has then been restored to roadworthy condition. Salvage titles are issued for cars that have been damaged in a crash, accident or weather event (like a flood) and are deemed by an insurance company to be totaled and too badly damaged to justify the repair costs.
When the cost of repairing a vehicle damaged in a crash approaches the value of the vehicle itself, an insurance company will “total it out” instead of paying to have it fixed. Sometimes the vehicle is technically repairable, but the insurance company is choosing not to have it fixed because it will cost too much. Other times the vehicle will have such significant damage that it can’t be repaired (this is common when the frame of the vehicle has been bent or damaged in a crash; repairing this is impossible).
When the salvage title is issued, the car is usually sold to someone else, who may choose to scrap the vehicle or rebuild it depending upon the extent of the damage.
What Does a Rebuilt Title Mean?
While the term varies slightly from one state to another, a rebuilt title is defined as one that is issued after a car which previously had a salvage title has been successfully restored to safe, working order. This differs from a clean title, which is issued only to cars with no history of being totaled. A previously salvaged car must be inspected by an entity approved by the state or jurisdiction that issues titles before a title is changed from "salvage" to "rebuilt."
Why should I care if the car has been rebuilt?
It’s crucial to know whether or not you’re dealing with a salvaged vehicle or junk car because there might be flood damage or other hidden problems which could affect its safety or reliability. Sometimes the damage is so severe that a vehicle can’t be expected to operate safely or properly again, and it is unethical and/or illegal to fix and sell these cars. Yet unscrupulous dealers or sellers try to do so anyway.
Questions to ask about a rebuilt title
What sort of damage was done to the vehicle? You can get the answer to this question from the Department of Motor Vehicles (DMV) or you can order a report from one of several companies such as Autocheck or Carfax.
If the frame was damaged, has it been realigned properly? A poorly-aligned frame causes undue wear and strain on everything from the brakes and drivetrain to the tires and wheels. It can also fail to protect the occupants appropriately in the event of a severe crash or rollover.
How extensive was the damage and where were the repairs performed? It is important to know that a quality repair job was done and that no corners were cut. You want to make sure that the parts used in the repair are good ones and built to factory specifications and that any welding will hold. Unethical shops may use substandard parts or put parts into the car only until they receive the new title then switch them back out for the damaged ones. Even worse, they may patch a car back together when it really just should have been retired from the road.
How can I tell if a car has been rebuilt appropriately? Because there is no foolproof way to know for certain how well repairs have been done, you should always have any car with a rebuilt title thoroughly examined by a certified independent mechanic.
Even if the car is not actually unsafe to operate, skipping this step can result in expensive breakdowns and problems that end up costing you more to repair than what you originally paid for the vehicle.
If you’re interested in buying a vehicle with such a title, it’s also important to get as much paperwork covering the repairs of the vehicle as possible. Look for detailed receipts for the labor and the parts to know that both were up to standard.
Should I avoid buying a car with a rebuilt title? If a vehicle has been previously damaged badly enough to warrant a salvage title, at first glance it might seem foolish to take a chance on it. Severe damage can compromise a car's structural integrity, so even if repairs were comprehensive enough to earn it a rebuilt title, it may not be entirely sound.
However, it’s not uncommon for a salvaged vehicle to never have had structural damage. If this is the case and if it’s been repaired by a reputable shop using factory parts, it can be as safe as an original vehicle with a clean title.
Because cars with rebuilt titles sell for far less than those with clean titles, you can often snag a great deal on a perfectly good vehicle if it’s been rebuilt properly. Just remember: it can be difficult to sell such a car later on down the line (and if you do, it will be for far less than the same vehicle with a clean title), so unless you’re planning to keep it for a long time, you may not want a car with a rebuilt title.
Is the car insurable? Insurance companies have a difficult time placing a value on a car with a rebuilt title, so they might be hesitant to offer full coverage on a vehicle whose integrity they believe might be compromised. Some insurance companies may actually even refuse to cover a car that has a rebuilt or reconstructed title at all.
If you’ve found a vehicle with a salvage title that you’re seriously considering buying, call your insurance company with the vehicle’s specific details to see if they would insure it and for how much.
Advantages to buying a rebuilt title car
Cars with rebuilt titles typically come with carefully documented repair work. In fact, a legitimate seller should provide you with the very same paperwork that was used to obtain the new title. At this point, your mechanic can use the documentation as a guide when inspecting the car and verify that the specified work was all performed as described.
If you are furnished with a properly documented list of repairs, in some cases even if the vehicle was salvaged, you may be getting more information than you would have when purchasing another car. An insurance company may not have thought it was worth repairing, but that doesn’t necessarily mean the vehicle won’t have plenty of life left in it. A post-salvage used car with a rebuilt title can often be purchased for significantly less money than it would have sold for otherwise, even with the cost of repairs tacked on.
As we’ve mentioned before, vehicles with a salvage title sell for far less money than their clean-titled counterparts. This is an advantage when you’re buying one, but less appealing when you go to sell the car (and remember, a seller is legally required to disclose to the buyer the salvage title status).
While buying a used car can be a time-consuming process, it’s worth examining every detail to ensure that you’re getting the right vehicle. A used car with a rebuilt title may work out great for you, but regardless of what you decide, at least you will be making a fully informed choice.