August 27, 2019

Rebuilt Title


What is the difference between salvage and rebuilt title? Rebuilt titles are repaired "totaled" cars. Find out how to buy and insure vehicles with rebuilt titles.

© CreditDonkey

There are three types of car titles:

  • Clean Title is for a car that has never been totaled.

  • Salvaged Title is given to a car that has been declared a total loss ("totalled"). This means the vehicle cannot be registered or legally driven.

  • Rebuilt Title is for a salvaged car that has been rebuilt.

How does a car get a rebuilt title? Read on.

A car's title is a legal document proving ownership of a vehicle. It contains important information about the vehicle, including:

  • VIN
  • Mileage at the time of sale
  • Owner information
  • Lender liens

What does a Rebuilt Title Mean?

To get a rebuilt title, a vehicle must be repaired to the point that it is fully functional. It typically must pass a state inspection before it can be sold and driven.

The state inspection helps prove that the vehicle is fit for the road. But while all rebuilt titles meet the requirements from the state, the quality of each rebuild can vary.

This is partly what makes rebuilt titles risky for insurance companies. Some rebuilds make the car almost as good as new, while others aren't very reliable in the long run.

Read on to learn the benefits and drawbacks of a rebuilt title.

Is it okay to buy a car with a rebuilt title?

Buying a vehicle with a rebuilt title is fine as long as you understand what you're getting. But be sure to do your due diligence before making a decision.

This includes finding out:

  • The history of the car or why it had to be rebuilt
  • What was rebuilt
  • The qualifications of the person who handled the rebuild
  • Whether new parts were used in the repair/rebuild
  • If the rebuild will pass state inspection. This is required to register the vehicle in your name.

Pros and Cons

The price might be right when buying a car with a rebuilt title. But the vehicle might end up being a money guzzler. Before you decide, here's a list of pros and cons to consider:

Pros

  • Less expensive

  • Repair work done and documented by a trusted repairer.

  • Inspected it and verified by mechanic

  • Great short-term solution

Get a rebuilt title fully inspected by a trusted and certified mechanic. They will be able to fully determine the quality of the rebuild. It's also a good idea to check the history of any used car through companies that sell this information.

Cons

  • Might need to pay cash since getting a loan is harder

  • Possible hidden damage that can lead to greater expense

  • Repairs made with used or damaged parts

  • Potential for unseen safety concerns

  • Harder to resell

  • Many insurers won't provide full coverage

Can a rebuilt title be cleared?
A rebuilt title CANNOT revert back to a clear title. Even if a car has been repaired/rebuilt to new condition and passes inspection, the title type will not change.

Is It Worth Buying a Rebuilt Title?

You can save up to 60% buying rebuilt versus new. That's a huge potential benefit for car-buyers on a tight budget. But you have to be willing to put in some time to find the right deal.

Rebuilt vehicles are worth buying if:

  • They were stolen or vandalized but the damage was minimal.

  • There was no major structural damage after a collision.

  • They were totaled by the insurance company as a quick settlement or to avoid paying out large claims.

Avoid buying a rebuilt title for a car with a history of flood, fire, or electrical damage.

Insuring Salvaged & Rebuilt Titles

Insurance companies are hesitant to insure salvaged vehicles since it can be difficult to trust the condition of the vehicle. Unless you can prove the car is in good shape through one or two fully certified mechanics, then the company will assume otherwise.

Companies that provide coverage typically offer two options:

Liability Only
This pays for bodily injury to a third party that is caused by an at-fault accident.

Full Coverage
Some larger national companies provide comprehensive and collision coverage. This will cover any damage done to the vehicle itself as a result of:

  • A collision
  • Fire
  • Storm
  • Theft
  • Acts of nature

Many insurance companies will actually require an additional inspection on a car with a rebuilt title to verify its condition.

How To Get Full Coverage on a Rebuilt Title

To purchase full coverage on a rebuilt title, you'll likely need to provide an inspection report that proves that the car is fully operational.

The inspection report also helps the company determine the value to insure the car for. If the insurance company agrees to full coverage, expect them to insure the car for up to 50% less than a similar car with a clean title.

The cost of full coverage will vary since rates are based on:

  • The likelihood of the vehicle being involved in another accident

  • Whether the vehicle has been properly rebuilt and passed all inspections

  • Whether or not it is fully operational

  • The value of the rebuilt vehicle

What to Do When Buying a Rebuilt Car

Buying rebuilt titled cars is less expensive than buying new cars with clean titles. But it also carries more risk.

Here are a few simple ways to protect yourself.

  1. Get an Inspection
    To make sure that the car is safe and can meet your driving demands, get an inspection report from 1–2 trusted professionals.

  2. Obtain Documentation
    Get a written valuation of the car. Otherwise, the insurance company will use their own valuation, which could potentially be less.

  3. Find an Insurance Company
    Not all insurance companies will insure a rebuilt title. If you want full coverage, you'll likely have to go through a larger, national insurance company.

Bottom Line

If you're looking for insurance on a rebuilt titled vehicle, it is important to shop around for insurance. Be sure to compare multiple insurance companies since each may handle rebuilt titles differently.

More from CreditDonkey:


How Long Does it Take to Get Car Insurance


How Does Car Insurance Work


What Should I Be Paying for Car Insurance

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