In short, used cars with rebuilt titles are literally rebuilt salvage-titled cars. Buying a used car with a rebuilt title has some upsides. Also, unlike cars with salvage titles , these vehicles are street-legal. Plus, while not every insurance company covers them, cars with rebuilt titles can be insured. But getting a used car with a rebuilt title carries some potential risks. Firstly, the lower resale value also applies when you try to sell the car, J.
Power notes. To be fair, most states only issue rebuilt titles after performing safety inspections. Some go even further and require rebuilding licenses. However, not all of them do either. And that leaves you with a potentially unsafe vehicle that could need more repairs down the road.
With all of that in mind, I decided to buy a used car with a rebuilt title anyway. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
All insurance products are governed by the terms in the applicable insurance policy, and all related decisions such as approval for coverage, premiums, commissions and fees and policy obligations are the sole responsibility of the underwriting insurer.
The information on this site does not modify any insurance policy terms in any way. When shopping for a used vehicle, you might come across one with a rebuilt or salvage title. This normally happens when an insurance company writes off the vehicle as unrepairable.
Some of the most common reasons why a car might have a salvage title are accidents, weather especially flood damage or the car was stolen. Vehicles given a salvage title may not be safe to drive due to the danger posed because of its extensive damage.
When a car with a salvage title has been repaired, it can receive a rebuilt title. This notifies the buyer of the previous history of the vehicle. To receive a rebuilt title, the vehicle must pass a series of tests to ensure it is safe to drive in some states. After being presented with a salvage title, you cannot drive, sell or register the vehicle until it has been repaired.
At this point, the salvage vehicle is typically sold by the insurer to a third party interested in repairing the vehicle or breaking it down for parts. By giving the repaired vehicle a rebuilt title, this provides the buyer more information about its history. A vehicle having a rebuilt title will likely have a lower market value because it underwent significant damage. This depends on your situation. On the one hand, it could be a good deal to buy a car with this title.
In some states, vehicles must pass rigorous inspections to receive a rebuilt title. And because the vehicle had a salvage title at one point, the resale value could be much less. This means you could save significantly. That said, there could be some drawbacks. Just because it passed state inspection does not mean the car is guaranteed to be safe for the long haul.
Additionally, it could be difficult to get insurance coverage for your vehicle. And circling back to value, while you might get a good deal to buy it, if you plan to sell it at some point, you probably will not get nearly as much as you would with a vehicle with a clean title. A vehicle with a rebuilt title may even be harder to sell compared to one with a clean title.
Buyers could be wary of rebuilt titles because this usually means that the car has been in a bad accident or even totaled in the past. Potential buyers looking to invest their money into a vehicle can be wary of rebuilt titles because of any issues that may emerge from past accidents.
Just because a vehicle with a rebuilt title passed state examinations does not guarantee safety in the long run. It is important to do your research and thoroughly examine the vehicle before settling on one. A vehicle with a lot of external wear may indicate the first sign that it is a lemon. Additionally, a vehicle that is not aligned may cause problems in the long run.
Lastly, it is important to get a professional mechanic to check the engine. However, rebuilt title insurance is easier to obtain, but certain stipulations will still apply. Even after the necessary repairs are made, some insurers may only offer liability coverage.
Many insurance carriers will not extend full coverage for salvage rebuilt vehicle because it is challenging to assess all of the pre-existing damage the vehicle has incurred.
Collision and comprehensive coverage, which are both optional on standard auto policies, are unlikely to be offered with this type of title. The insurance company sells the vehicle at a salvage auction, where it might be purchased by a junkyard for parts or by someone who plans to repair it. This is where things get tricky for the potential buyer. Did the person doing the repairs catch and solve every potential issue with the vehicle? Did they use parts equal to or better than what the factory installed originally?
Is the vehicle now as good as those without a rebuilt title? For most vehicles, you may never know the answers. To put it plainly: buying a vehicle with a rebuilt title is tremendously risky. For example, will an issue arise months or years after the repairs?
More importantly, will you ever be able to resell it? First, be sure and get a reliable vehicle history report for the vehicle; as the reason for the original salvage designation can vary greatly — especially by state. You should never buy a used car without receiving a vehicle history report.
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