What is a rebuilt title vs. a salvage title?

You might find a vehicle with a salvage or rebuilt title when you are looking for a used car. These vehicles are a great fit for the right buyer but it is important to fully understand them before you decide to buy or to pass.

What are the differences between a salvage and rebuilt title?

Here are two closer looks at each title to help you understand what they mean.

What is a salvage title?

The salvage title is used when vehicle repair costs exceed its market value. In this case, the vehicle is considered to be totaled. This is usually when the insurance company declares the vehicle unrepairable. A salvage title can be issued for many reasons, including weather damage and theft. A salvage title can make it unsafe to drive a vehicle because of the dangers it poses due to extensive damage.

What is a title that has been rebuilt?

A car that has a salvage title can be rebuilt after it is repaired. This informs the buyer about the vehicle’s previous history. The vehicle must pass several tests in order to be eligible for a rebuilt title. In other states, however, prospective buyers might not need to be informed about the vehicle’s past.

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What is the process for a car to be salvaged or rebuilt?

A total loss may be declared by an insurance company if a vehicle sustains severe damage that exceeds 70%-90% of its value. After this determination is made, the state motor vehicle agency will change the car’s title to salvage or junk. You cannot drive, sell, or register the vehicle until the vehicle has been repaired after it is presented with a salvage title.

The insurer will typically sell the salvage vehicle to someone who is interested in fixing it or selling it for parts. The state’s motor vehicle agency will issue a rebuilt title if the vehicle passes safety inspections. The buyer can learn more about the vehicle’s history by giving it a rebuilt title.

What does a rebuilt title do to a car’s value?

Because it has suffered significant damage, a vehicle with a rebuilt title is likely to have a lower value. A car with a rebuilt title may have 20%-40% less value than similar models that have clean titles. This could potentially cost you thousands of dollars.

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Do you need a rebuilt title to buy a car?

It depends on your circumstances. This title could make it a great deal to purchase a car. To receive a rebuilt title in some states, vehicles have to pass strict inspections. The vehicle may have a salvage title, which could lower the vehicle’s resale price. This could help you save significant money.

There could be drawbacks, however. It is not guaranteed that the vehicle will be safe over the long-term just because it has passed inspection by the state. It might be difficult to obtain insurance coverage for your vehicle. You might not get as much if the vehicle is valued if you intend to sell it.

A vehicle with a rebuild title might be more difficult to sell than one with a clean title. Rebuilt titles can be a red flag that the vehicle has been involved in an accident, or is even damaged. Rebuilt titles can pose a risk to potential buyers who are looking to put their money towards a vehicle.

Before you buy a vehicle with a rebuilt title, here are some things to keep in mind:

  • How the vehicle was damaged
  • The extent of the damage
  • The process of vehicle repair and whereabouts
  • The vehicle was examined by a certified or professional mechanic.
  • It is important to check with your insurance company if your vehicle will be covered by your rebuilt title.
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A vehicle that has passed state examinations does not necessarily mean it is safe. Before you buy a vehicle, it is important to thoroughly research the car and do thorough inspections. The car’s alignment and frame can be a good indicator of whether it is worth the investment. If the vehicle has a lot of exterior wear, it could be a sign that it’s a lemon. A vehicle that isn’t aligned can cause long-term problems. It is also important to have the engine checked by a professional mechanic.

Insurance with a salvaged or rebuilt title

It may be difficult to locate salvage title insurance because the vehicle is not safe to drive. Rebuilt title insurance can be obtained, though there are still some stipulations.

Some insurers might not offer liability coverage even after repairs have been made. Many insurance providers won’t extend full coverage for a salvaged vehicle, as it is difficult to determine the extent of any pre-existing damage. Comprehensive and Collision are optional on standard auto policies. They are unlikely to offer this type of title.

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A rebuilt title means that the vehicle has been altered and is therefore less valuable. Insurance companies may also consider a rebuilt title more risky because it could be hidden or unnoticed damage to the vehicle.

Once you’ve found an insurance company that will insure your car with a rebuilt title you might be able take additional steps to get more coverage. You may be able provide additional information to your insurance company to prove that a vehicle with an rebuilt title is insured. These documents include a statement from a professional mechanic, photos that show the vehicle’s condition, and receipts for repairs. This is essential when purchasing a vehicle with a rebuilt name.

What are the advantages and disadvantages to having a salvaged or rebuilt title?

Although buying a vehicle that has been damaged in the past can be risky, it is possible to make a smart purchase. Vehicles with a salvage title or rebuilt title are generally cheaper than vehicles with clean titles. According to Kelley Blue Book, salvage and rebuilt vehicles are generally 20%-40% cheaper than similar vehicles with clean titles.

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However, a car purchased with a salvage title may result in higher long-term costs if repairs were not done to the highest standards. You are accepting that the vehicle has sustained extensive damage when you buy a salvaged rebuilt vehicle. There may be undetected or unreported damages that can arise later.

You may also have difficulty finding car insurance even if your vehicle is fully repaired. Even if your vehicle’s value is lower, insurance companies that insure vehicles with a rebuild title might charge you the same premium as those with clean titles.

Questions frequently asked

What is required to get my car a rebuilt title?

Each state has its own regulations. Some are more strict than others. To obtain a rebuilt title, it is best to contact your state’s motor vehicle department.

Is it right for me to have a salvage title vehicle?

A salvage title vehicle is a great option if you’re an experienced mechanic, or know someone who can do great work at a low price.

What should I look out for when purchasing a vehicle with a rebuild title?

To determine the cause of the salvage title status, first check the vehicle’s history using Carfax or another similar service. A salvage title can be awarded in some states, such as Ohio, for something as simple as an abandoned vehicle.

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Next, find out who repaired the damage and how they did it. You can research them online by looking at their Better Business Bureau reports, Google consumer reviews and any complaints to your state’s office for consumer affairs. This will help you determine if they are reputable and well-respected. These steps will make it easier to purchase a vehicle with a rebuild title.