What is a Rebuilt Title on a Car? Comparing Rebuilt vs. Salvage Title

A rebuilt title means a car was previously declared a total loss by an insurance company, and sometimes it has been given a salvage title. But, since it has been repaired and passed the state inspection, the car can be driven on the road again.

The concept of a rebuilt title often brings mixed feelings among potential car buyers. Since a rebuilt title can signify a vehicle has been restored to a drivable condition after sustaining significant damage, and this is a good thing.

On the other hand, it can raise concerns about the quality of repairs and the vehicle’s long-term reliability. This article will explore what a rebuilt title is, the differences between rebuilt and salvage titles, the pros and cons of purchasing such vehicles, and essential considerations for buyers.

What Does a Rebuilt Car Title Mean?

If you find a vehicle with a rebuilt title, it means it was previously involved in a severe accident and declared a total loss by an insurance company. In such situations, the vehicle sustains serious damage, is issued a salvage title, and is unfit for the road.

These vehicles may become roadworthy and pass a state inspection test with proper repairs. They must also have their original VINs and be free from any major structural damage that could compromise safety.

When these conditions are met, the DMV will grant them a new, rebuilt title to show that the car is back in excellent condition and roadworthy.

READ ALSO: Should I Buy a Car with a Rebuilt Title? Pros & Cons Explained 

How Does a Vehicle Get a Rebuilt Title?

A rebuilt title means that the car was once declared a total loss due to extensive damage, but the car has been repaired and passed the state’s inspection. Hence, the car’s title changed from salvage to rebuilt.

The process involves several steps, each of which impacts the car’s value, safety, and resale potential. Here’s what caused a car to earn a rebuilt title.

Declared as Totaled

When a vehicle’s repair cost exceeds its market value, the vehicle will be declared as “totaled”. This can happen due to:

• Accident damage
• Flood, fire, or hail damage
• Theft or vandalism

The Car is Repaired

Most totaled vehicles are considered unsafe to drive and are marked as “Salvage” or “Junk.” However, some can be repaired and restored. The repair process includes:

• Replacing damaged parts
• Restoring vehicle safety and functionality

State Inspection

Before a rebuilt vehicle is issued, many states require an inspection to confirm that the vehicle is worthy. Some states have less strict inspection standards, which can lead to title washing, removing the salvage status from the title.

The Car Gets a New Title

Once the car passes inspection, it gets a rebuilt title and can be legally driven again. However, it will always show its rebuilt status on its vehicle history report, which can affect its resale value and insurance rates.

Differences Between Rebuilt and Salvage Titles

If you don’t understand the whole salvage and rebuilt title situation, we’ll explain it clearly. Let’s examine the difference between the title brands. How does a car get a salvage or rebuilt title?    

Salvage Title

A salvage title is assigned to a vehicle that has been damaged to the extent that the cost of repairs exceeds about 75-80% of its market value. 

This designation is often given after an accident, flood, or other catastrophic event. Vehicles with salvage titles can only be legally driven once they have been repaired and re-inspected.

Rebuilt Title

As already explained, after a vehicle has been given a salvage title, it may be roadworthy again through repairs. These repairs must be done by a professional mechanic, and then the vehicle must pass a safety inspection by the Department of Motor Vehicles.

If the vehicle passes, it gets a rebuilt title. This warns car buyers and owners that the vehicle has been previously damaged and lost a lot of its market value, but is now in roadworthy condition.

Key Differences

The main differences between salvage and rebuilt titles include:

• Condition: Salvage titles indicate significant damage, while rebuilt titles signify repairs have been made.
• Legality: Salvaged cars cannot be driven until they have been repaired and passed inspection, while rebuilt titles allow for legal use of the car on the highway.
• Value of the vehicle: Auto vehicles with salvage titles have a much lower value than cars with rebuilt titles.

Pros and Cons of Buying a Car with a Rebuilt Title

If you are considering buying a used car with a rebuilt title, knowing the pros and cons of buying one is beneficial. They are:

Pros

• Lower purchase price: A car with a rebuilt title will sell considerably less than a similar model with a clean title. You can consider this if the money is tight, though never disregard the importance of excellent quality and standard.
• Potential for a reliable vehicle if repairs are done correctly: Sometimes, if the repairs are done efficiently and professionally, you will realise that the car is better than you assumed. 

For instance, some salvage vehicles may still be mechanically perfectly good, but they require expensive parts, parts that the insurance company may not have agreed to pay for. This gives you a great buy at an affordable price.

Cons

• Possible hidden damage: Some rebuilt vehicles may have hidden mechanical issues that arise after a couple of years. Such problems could cost you hundreds or thousands of dollars in repairs later on.
• Lower resale value: A vehicle with a rebuilt title is likely to have a lower resale value compared to another car model or the same brand but with a clean history. Consequently, if you decide to sell it later on, this affects your investment negatively.
• Difficulty obtaining insurance and financing: Finding insurance coverage for a rebuilt title car is difficult because most insurers are reluctant, and financing options are limited.

READ ALSO: How Much Does a Rebuilt Title Affect a Vehicle’s Value? 

How to Verify the Quality of Repairs on Rebuilt Vehicles

In some cases, a vehicle can appear perfect on the outside with no visible signs of wear and tear or damage, while it is really much more damaged below the surface. With this in mind, you don’t need to take chances.

To avoid dealing with mechanical issues after your vehicle purchase, you have to ensure it is in exemplary shape. How? By following these simple steps:

Vehicle Inspection by a Mechanic

It is important to have a qualified mechanic inspect your rebuilt title vehicle before purchasing it. An expert may be able to spot potential problems that cannot be seen by someone without training and ensure that repairs are done well.

Repair Documentation

You also need to review the vehicle’s repair records to understand the original problems and how well repairs were made.

A reputable seller should have all the documents you need, which should clearly outline the nature of the damage and the repairs performed. This transparency can help assure buyers of the vehicle’s condition.

Test Drive

Conducting a thorough test drive is vital to check for any operational issues. Pay attention to how the vehicle handles any unusual noises and the performance of essential systems such as brakes and steering.

Vehicle History Report

A vehicle history report is another important tool to make the right decisions in the used car market. With a vehicle history report, you can track the severity of the accident and damage sustained, alongside the repairs.

You can also find out other red flags like theft records, flood damage, title brand records, maintenance history, and more past records with a VIN decoder tool and vehicle history report.

Auto Insurance and Financing for Rebuilt Title Cars

Buying a car with a rebuilt title typically will introduce you to various challenges in financing and insurance. Since these vehicles have been involved in serious accidents in the past, there is a high chance of a breakdown or structural failure.

This risk makes it difficult to receive insurance and finance salvage or rebuilt vehicles. However, some car insurance companies accept these vehicles but will most likely charge higher premiums. To go past these challenges, you must remember to:

• Shop around for insurance: You need to do the work and put a lot of effort into research. Look for insurance companies specialising in high-risk vehicles with favourable policies for rebuilt titles.
• Seek specialised lenders: The usual lenders will refuse to give you financing, but you can search for one that does. You can also check for lenders focused on financing rebuilt title vehicles.

The key lies in how much research you put in. Remember to keep repair records and receipts as proof of repairs for the insurer or lender.

Legal Considerations and Disclosure

When selling a rebuilt car, there are legal requirements for disclosure. Sellers must inform potential buyers of the vehicle’s title status. Sharing this information is important as it gives buyers directions and choices to make the best decision.

Keeping the rebuilt title hidden will only lead to legal repercussions and loss of trust. If you are a buyer, you must verify the title status through a title check service. This way, you can be sure of your purchase through historical records and make the right decision.

Conclusion

In summary, a rebuilt title can offer a cost-effective option for car buyers, but it comes with its own set of risks and considerations. By knowing the pros and cons of getting a vehicle with a rebuilt title, you can consider the value you’ll receive versus the potential costs.

If it’s worth it, you can give it a try. It is important, though, to ensure you carry out mechanical inspections, check repair records, go for test drives, as well as obtain a vehicle history report from recognisable companies such as Detailed Vehicle History.