What Does a Rebuilt Title Mean?
If you’ve bought a used car before or shopped around on the open market of private sellers, you’ve probably heard or run into a vehicle with a “rebuilt” or “salvage” title. Often, these vehicles are sold for less money than a vehicle with a clean title – but what’s the difference?
We’ll also cover the upsides and downsides to purchasing a vehicle with a rebuilt title to help you make a more informed decision.
Rebuilt and Salvage Title Explained
A rebuilt or salvage title can often be one and the same, because states can classify the vehicle as one, the other, or both. When a vehicle is damaged – either from a wreck, flood, fire, or other catastrophe, eventually the cost reaches the point where the vehicle is a “total loss” – meaning the cost to repair the vehicle professionally is not worth it in terms of value. At this point, the vehicle is sold by insurance companies as a salvage vehicle at an auction, where salvage yards can bid on the vehicle for parts or scrap. During this process, many “borderline” vehicles are often sold back to hobbyists or people closely connected to repair facilities, to repair the vehicle and place it back for sale – essentially, to “flip” the vehicle as the industry would call it.
Because this process leaves a lot of grey area on vehicles being properly repaired, or safe to drive, once a vehicle is placed under a salvage title, it cannot ever legally return to clean status. In some states, the vehicle must pass inspection and receive a rebuilt title. In other states, the vehicle stays as a salvage title as a mark to show that this vehicle does, in fact, have a damaged history.
Salvage and rebuilt titles often have a level of taboo about them. Many people immediately shy away when they realize the vehicle that they thought was an incredibly great deal has a salvage history behind it. Rightly so in some cases, but not all.
Is It Bad to Buy a Car with a Rebuilt Title?
The answer to this question is not yes or no, but rather “proceed with caution”. Understand that any vehicle that has either of these titles has been declared a total loss at some point in its life. That doesn’t necessarily mean that the vehicle is not safe, or drivable, or will handle like any other vehicle on the road, it just means that it must be marked as such, and because of that, if you ever go to sell the vehicle, expect the same level of scrutiny that you should perform here:
- Examine the history – get as much detail on exactly what caused the total loss, and how the damage was repaired. Several car history websites will often have this information
- Was the vehicle repaired professionally? Many “fly by night” backyard and warehouse resellers buy salvage cars and repair them quickly, and cheaply. Some of them are genuinely good repairs – even by hobbyists, but many others are not. Examine what was repaired, how it was done, and ask questions
- For flood damage, look for the presence of mold or mildew, and make sure that in a flood repair that the entire interior was stripped down, cleaned, and replaced. Check all electrical components to make sure everything is operating correctly
- Many salvage vehicles are often fire damaged – be sure that you get a complete understanding of what caught fire, and how it was repaired
If you’re considering purchasing a car with a rebuilt title, you should gather as much information as possible to make an informed decision. Keep in mind, that many vehicles older than 12 years are often considered a total loss for very minimal damage. This is because the cost of doing the repair professionally – even for a fender-bender is often upwards of 3500.00. A vehicle will enter the total-loss categorization when the repairs are equal to roughly half the total value of the vehicle. This is why many older vehicles on salvage titles can often become a good project for hobbyists looking to get an otherwise good car for a cheap price. Consider the scenarios below to understand how distinctively different these 2 examples can be.
You are looking at a 2005 F250 pickup truck, that is listed at $4600.00. In talking to the owner, they purchased the truck on a salvage title due to a front end collision which damaged the bumper, and front fender. Even in this shape, the truck was still drivable, but the damage was enough to declare a total loss. The owner replaced both parts with used parts, had the truck repainted by a friend, and is able to show you some photos of the work. This would be considered a very safe purchase to make on a salvage title.
On the other hand, you are looking at a 2016 Subaru WRX, and find one that is $5000.00 below the average of all the other WRX’s you’ve seen. The owner tells you that they bought if off of a guy who worked at used car lot, and doesn’t know exactly what happened to the car, how it was repaired, or any history on it. Without consulting a professional body-worker to look over the vehicle closely, this would be a very iffy purchase to make.
What are the Downsides of a Rebuilt Title?
While rebuilt title vehicles can be a good investment, the most significant risks are fraud and deception, which could cost you in the future. While in some cases, a professional will recognize a salvage car with good potential for repair and take it up as a project to rebuild for resale after considering the current market conditions and their workload, this isn’t always the case.
Whether they were done with good intentions or not, there’s never a guarantee that whoever had the vehicle before you repaired it properly. And since the car has a salvage or rebuilt title, you can’t take legal action if you purchase the vehicle only to learn down the road that you were deceived or ripped off.
Remember that even in the cases where a quality repair was made (and these are the majority), the stigma of a salvage title will always be on the vehicle, which often makes it much more difficult to sell later. Keep in mind that most used car lots and dealerships will not touch, nor sell a salvage title vehicle. There is just too much explaining and documentation for them and it’s simply not worth the while. If you are considering purchasing a vehicle that is salvage for a project, it can be a great learning experience, and often times the money saved doing the work yourself is massive, especially if you plan on keeping the vehicle for a long time.
If you’ve recently purchased a car with a rebuilt title but are having doubts or issues with its operation, stop by AutoZone and let our knowledgeable team take a look at it. Or, one of our Preferred Shops can help you look a vehicle over. We go the extra mile to provide you with the most trustworthy advice. We offer a wide range of products and services to help keep your vehicle running its best.