You might be asking yourself, "Should You Buy a Car With Rebuilt Title?"
When buying a used car, should you check its history before buying it? Or do you just go ahead and buy it without knowing anything about its past?
Of course the correct answer is to ALWAYS check the vehicle history report for the car's history.
If the car was totaled by the insurance and labeled salvaged, then fixed and re-titled to Rebuilt, does that make it safe to drive and buy?
Yes and no. A rebuilt title basically says the part was so damaged that it was branded salvage. But someone purchased it and repaired it to the standards to pass inspection.
Is it worth buying a rebuilt titled car since it looks practically brand new?
If you already purchased a car with a rebuilt title, it doesn't mean that you are stuck with a bad investment. It just means that you should aim to just enjoy the car for years to come since you will most likely take a hit if you try to resell the car on the market.
In this article I'll explain why you should always purchase a car with a clean title. And if you decide to buy a rebuilt car anyway, then I'll also share with you my top tips for finding a great deal on a vehicle.
What is the Difference Between a Rebuilt Title vs Salvage Title?
- What Is A Salvage Title? A salvage title is given to vehicles that have been damaged beyond repair. These cars are often totaled. They could have been hit by another vehicle, rolled over, caught fire, etc. In some cases, a salvage title is given to a car even though it hasn't suffered any major damages. This happens because the owner simply wants to sell the car privately rather than through a dealer.
- What is a Rebuilt Title? A rebuilt titled car is one that has been salvaged and restored to working condition. The car may have been in a wreck, or it may have been damaged in some other way. In most cases, a rebuilt title is issued when the car has been in an accident and the cost of repairs exceeds the value of the car.
Should You Buy a Car With a Rebuilt Title?
A vehicle with a rebuilt title might be a good deal. But you should consider how the vehicle was damaged, whether it had an accident, how thorough the repair process was, and how well the mechanics did their job. You should also examine the frame and alignment of a car before buying. And you should check out the condition of the tire treads. Finally, you should get a professional mechanic to check over the engine.
The inspection of a PPI is always recommended on any car purchase, as one of my golden rules.
Is It a Bad Idea to Buy a Used Car With a Rebuilt Title?
A salvage title is typically used for vehicles that have been wrecked or damaged beyond repair by the insurance adjuster. Sometimes, however, a car that has been salvaged still works fine, even though it doesn't look like much of a bargain. In fact, buying a salvage title can actually save you money over purchasing a brand-new one once the car is fixed and branded with a rebuilt title. But there are risks involved.
Rebuilt titled cars typically are priced 75%-80% of the retail value. Sometimes it can be discounted further but that is up to negotiations with the seller.
If you decide to go ahead with the purchase anyway, here are a few things to keep in mind. First, while you will save money initially on the purchase price, you might find it a challenge to find full car insurance coverage.
GEICO, my insurance company, would only offer liability coverage on rebuilt cars. So keep that in mind.
Second, you could end up paying more for repairs down the road. While the car passed inspection, dealerships MIGHT decline to repair any rebuilt titled car. I have seen that happen to a few automotive YouTubers .
Third, you won't know how well the vehicle runs until you've driven it. If the seller isn't honest, he might try to hide potential issues that were not able to be fixed. I would NOT buy a repaired salvage title car without a Rebuilt Title. In order for a Salvage Car to be re-titled, photos of the initial damage and receipts of the repairs need to be submitted to the inspector. If you don't have those, you might be screwed.
What are the upsides and downsides of buying a car with a rebuilt title?
Many states require rebuilt titles before they issue them. Like I mentioned before, this process involves repairing damaged parts and ensuring the vehicle meets safety requirements. However, there’s no guarantee that the repairs have been done correctly. If you buy a used car with a rebuilt title, it could still fail an official inspection. THIS WOULD BE BAD!
A new car buyer should know what to look for when purchasing a car with a rebuilt or certified title. Here are some things to consider:
- How long has the car been rebuilt? The longer it’s been since the original repair, the less likely it is to meet current safety regulations. Like I mentioned in my buying guide, I like to see ownership for at least 12 months or a year.
- What does the certificate say? Certificates don’t always tell the whole story. Some states allow certain types of damage to go unreported. For example, California allows vehicles to be repaired without having to show proof of insurance. Other states report only the most serious issues.
- What is the asking price and final sale price? Depending on how bad you want that car, you will have to weigh if it's worth owning a rebuilt title vs a clean title car. If you plan to keep it or it's a very desirable car, then it might be worth moving forward.
Rebuilt Car vs Clean Titled Car
While a clean title does not guarantee a good deal, it does mean that a vehicle has been inspected and repaired properly. If there are no major issues found during inspection, the seller may offer a discount for a clean title. In addition, a vehicle with a clean record may receive better financing terms because lenders know that the car has passed a thorough inspection.
A rebuilt car with a one-owner, might peak my interest but I would ONLY consider purchasing if the price was too good to let it go or if I personally knew who was the owner of the car. 9 times out of 10, I would prefer a clean title car over a rebuilt titled car. But if you are into rebuilds, check out DIY Salvage Guy on YouTube for his salvage car rebuilds.
Tips to Buying a Car With a Rebuilt Title
A Salvage Title Doesn't Mean the Car Will Run Well
A salvage title doesn’t mean the car will run poorly. However, a salvage title does indicate the car had major mechanical failures, such as a blown head gasket, transmission failure, or electrical system damage. These types of problems aren’t likely to go away without extensive repairs, which could lead to further breakdowns.
If You Buy a Used Car With a Salvage Title, Expect Challenges To Restore It Yourself
You might think you'll save money by purchasing a car with a salvage tag, but that isn't always true. Many mechanics don't want to touch salvaged vehicles because they know how difficult it is to repair them. This includes frame damage, mechanical and body and paint work. Realistically, the cost of repairing the vehicle could exceed what you paid for it.
Don't Buy a Rebuilt Vehicle Without Inspecting It First
Before you purchase a used car with a rebuilt title, make sure you've inspected the vehicle thoroughly. Look under the hood, check out the tires, and check out the interior. Even if the seller says everything checks out, ask for documentation showing the car passed inspection and registered. You will want to make sure that the car is legal to drive on public roads.
Here's How to Insure a Car With a Rebuilt Title
A car with a rebuilt title — one where the original manufacturer's name has been removed and replaced with another name — can still be insured, according to insurance experts. However, some insurers don't want to write policies covering such vehicles because it could lead to claims being filed against them.
Insurance companies typically require a clean bill of health from a mechanic or body shop, along with proof that the owner purchased the vehicle legally. They often won't insure vehicles that have had extensive work done to them unless the repairs meet certain standards. It is VERY important that you make sure that your car passes inspection. DO NOT BUY unless it's already titled, registered and on the road.
If you're buying a used car, make sure the seller provides documentation showing the car's history. You might even ask for a copy of the damage and repairs before making a purchase.
Find Auto Insurance for a Car With a Rebuilt Title
Your insurer will want to know whether the car has been inspected by a certified mechanic. This is important because many insurers require a certificate of repair from a certified mechanic to prove that the car has been checked over and fixed properly.
As mentioned previously, insurers won’t cover cars with a salvage title, they are looking for rebuilt or clean titles. Salvage vehicles aren’t considered safe enough to drive, so they’re often sold at auction. Salvage titles show up on the VIN plate, and you’ll see a notation like “salvaged title.”
Rebuilt titled cars are not lemons. But you need to understand that many buyers may lose interest if you plan to resell in the future. Rebuilt cars are good if you plan to keep the car until it breaks and if you understand the depreciation value is going to hit rock bottom sooner rather than later.
An important fact is buying a car with a rebuilt title may be a very smart financial move, IF you plan to drive it until the wheels fall off. These vehicles are often less expensive than their older counterparts, which means that you can save a ton of cash without sacrificing anything in terms of performance.
Of course, you shouldn't buy a vehicle solely based on its price tag. Instead, look for long term reliability or collectibility of the make and model. Rebuilt collector cars still maintain their value among enthusiasts.
Weigh all your options and proceed with caution, you'll know exactly what you're getting into before you commit to a purchase. Good luck!