A rebuilt car title means that your car suffered extreme damage at one point and was declared a total loss. From there, the car was repaired to the point that it has been deemed street legal. Repaired titles are given as a way to show that the car has been rebuilt, rather than left as a salvage title.
If you are financially savvy, then you are always looking for a good bargain. This is doubly true when you are shopping for a car. So, when you heard about a rebuilt car for sale at more than 30% lower than its Kelley Blue Book value, you’re all about it. But is it a good deal? What does a rebuilt car title mean for the vehicle?
A rebuilt car is a car that was a branded title or salvage title car. This means that the vehicle experienced a very high level of damage. After the damage occurred, someone fixed it and it is now road-worthy and street legal.
Getting a rebuilt car has its risks but it can pay off. Let’s talk about what this means for you.
What is a rebuilt car title?
A rebuilt car title means that your car underwent serious damage in the past or was returned as a result of lemon laws. From there, the dealership or person who bought, or was given, the car repaired it.
Rebuilt titles mean that your car was once unworthy of street driving according to local laws, but that it’s been repaired to the point that it is now safe to drive again.
Can a rebuilt title affect car insurance?
Yes, most insurance companies will offer a liability insurance policy for a vehicle with a rebuilt title. However, they will usually not offer a full coverage policy.
A rebuilt title means that your car had a dodgy history, meaning that you may have a harder time getting car insurance for a rebuilt vehicle. Insurers often find these cars to be a liability because it is not always easy to confirm the quality of the repairs made on the vehicle.
Rebuilt title cars are seen as more prone to accidents, so the process of getting insurance will be hard. Moreover, your insurance company may raise your rates based on the title alone. This is mostly due to the fact that the car was once a salvage title.
What are the benefits and problems of buying a rebuilt title car?
The biggest benefits of buying a rebuilt car all have to do with costs, which may be a huge factor for you. Unfortunately, there are some risks to consider also.
Here is a list of the benefits and drawbacks to consider.
- Lower price. A rebuilt title means that it’s already been a salvage car, which may make it harder to sell (or insure). Dealerships will typically sell them for way cheaper than their Blue Book price—often for a discount between 20 and 40%.
- Damage may not be terrible. Declaring a car a total loss depends on the value of the car. This means some cars don’t need to experience horrific damage to be considered “totaled.” This doesn’t mean there won’t be damage to fix, but it may not be as extensive as you previously thought.
- Expensive insurance. Insurance company policies may bar you from affordable or good coverage. You will generally have a difficult time finding a good deal on insurance with a rebuilt title. Before you buy this kind of car, make sure that you can feasibly insure it.
- Hidden damage. Yes, the previous owner may have made the necessary repairs required to ensure that your car is not a total loss anymore. However, that doesn’t mean every repair was made. It was just enough to make it drivable.
- Below-average value. A car with a rebuilt title is always going to have a below-average value. Even with trade-ins, there’s a stigma against rebuilt cars since the vehicle was once a total loss. Rebuilt vehicles tend to sell for 60% of the typical market value.
- Reselling may be hard. Not many people want to buy a car that has been severely damaged. Any kind of extensive damage listed on the vehicle’s history will be a liability. This means you’ll often have a hard time finding a buyer, even at half a car’s typical cost.
- Trading in may be difficult, too. While it’s not common, you may end up just having to sign your car title over to an auction house or completing a DIY sale with someone else. Even getting title loans can be difficult for rebuilt vehicles.
- Harder to get financing. Finding an auto loan provider that will finance a rebuilt title car can be a challenge.
How to finance a car with a rebuilt title
It might be possible to get an auto lender to finance a vehicle with a rebuilt title, but it won’t be easy. This auto loan offer engine can help you determine what terms and rates you can qualify for. However, using a personal loan may be a more realistic alternative. The catch is that because personal loans are unsecured loans — i.e. the car won’t be used as collateral and full coverage insurance won’t be required as a condition of the loan — the interest rates are usually higher.
It is always important to compare lenders before choosing a loan, but this is particularly important if you are shopping for an auto loan and your vehicle has a rebuilt title.
Should you buy a car with a rebuilt title?
This all depends on which rebuilt title car you want to buy. Some are declared salvage cars and total losses as a result of extensive damage to the cars’ paint jobs or exteriors. Those are generally a safe bet when repaired.
However, each state has different requirements regarding rebuilt titles, which may not make them a good idea. Most states only require a series of safety inspections from the state’s DMV. Some states, on the other hand, require the title carrier to record and save all receipts associated with the repaired vehicle to ensure no parts are illegally modified or stolen.
Are rebuilt cars safe to drive?
For the most part, they are considered safe to drive. A rebuilt title means the car has undergone an inspection at the local DMV and that it has been deemed street safe. However, this doesn’t mean that the cars are damage-free. Hidden damage can pose a risk to everyone in the car.
Are dealerships required to tell you if a car is a rebuilt vehicle?
This is one of the biggest problems with buying a used vehicle. Laws governing what salespeople are and aren’t required to tell you vary from state to state. You need to research the mandatory disclosures in your state and city.
That said, dealerships are generally required to surrender information if you ask. You can take legal action if a salesperson lies or presents misleading information about a vehicle, which they obviously want to avoid.
The best way to protect yourself from salesperson tactics is to request a vehicle history report. This report includes valuable information on the car’s history, from odometer readings to a list of any accidents the vehicle was in.
Are most used cars rebuilt vehicles?
Believe it or not, most used cars are not considered to be rebuilt titles. To be rebuilt, they first have to be salvage vehicles. Most cars do not have a total loss on their records. So, while they may have damage due to a fender bender, they won’t be a rebuilt vehicle because it wasn’t a total loss.
While they may have minor damage, most cars that you’ll see for sale at a reputable dealership will have a clean title.
How do you turn a rebuilt title into a clean title?
Despite what some scammers may say, you can’t turn a rebuilt title into a clean title. Once a car has been given a branded title, or has been declared a total loss, you cannot do anything to make it a clean title. This is a scam that is known as title washing.
Title washing is not doable and, in many cases, can land the car’s owner in hot water if an attempt to wash the title is noticed. It’s actually a federal offense, so if you hear about this happening, it may be time to report this to the authorities.
Are rebuilt titles bad?
Rebuilt titles are not great (nobody dreams of buying a vehicle with a rebuilt title), but they aren’t always terrible. It’s possible to find a reliable bargain for a car that’s a rebuilt title. It often takes personal connections, multiple inspections from mechanics you trust, as well as luck. Think of a rebuilt vehicle as a “higher-risk purchase” that could end up being a great deal.
- A rebuilt title means that your car was once declared a total loss by an insurance company, but then got repaired until it was drivable.
- People often buy them for a price as low as 60% of the car model’s typical purchase price.
- Unfortunately, rebuilt cars are often difficult to insure. There’s also the possibility that the car has hidden damage that wasn’t previously fixed.
- While rebuilt vehicles are deemed safe for public roads by the government, the truth is that they still may require additional repairs.
- In some states, it is illegal to sell a car that was ever a salvage vehicle, including rebuilt title cars.
View Article Sources
- Rebuilt Vehicles — Texas Department of Motor Vehicles
- Rebuilt Title Established by Salvage Title Checklist — Colorado Department of Revenue Department of Motor Vehicles
- What is a Branded Title on a Car? — SuperMoney
- A Complete Guide to Choosing the Best Auto Insurance — SuperMoney
- Best Cheap Car Insurance | April 2022 — SuperMoney
- 2020 Auto Loan Industry Study — SuperMoney
- How To Get The Best Deal On A Used Car — The Super Guide — SuperMoney
- Should I Buy a New or Used Car? — SuperMoney
- Can You Lease a Car and Then Buy It? — SuperMoney
- Can You Buy a Car With a Debit Card? — SuperMoney