Every vehicle has a car title, which is a legal document that shows proof of ownership. Car titles also reveal whether a car has been badly damaged. If you’re looking for a used car, you might come across a car listing for a rebuilt title vehicle.
What does this mean and should you still consider a car if it has a rebuilt title vehicle? We have the answers.
What is a Rebuilt Title?
Car titles fall under two major categories: clean and branded. A clean title means that a vehicle hasn’t had any serious damage or issues, while a branded title means that the car has a serious issue that needs to be disclosed to potential buyers. This could include that a vehicle was in a serious wreck, was stolen, had the odometer rolled back, or sustained damage from hail or flooding. The most common branded title is a salvage title. (For more examples of branded title vehicles and a description of salvage title vehicles, check out our handy guides.)
A salvage title car has incurred major damage likely from an accident and has been deemed a total loss by an insurance company. Or, in its simplest sense, it costs more to repair the vehicle than the insurance company is willing to pay. If the car has been rebuilt and passed a safety inspection, it becomes a rebuilt title vehicle.
How Does a Car Get a Rebuilt Title?
Title laws vary by state, but in most states a car must pass an inspection in order to be issued a rebuilt title. State laws also vary as to what percentage the damage is of the vehicle’s value in order to brand the title. For example, in New York, damages must be at least 75 percent of the car’s value in order to be designated as a salvage title vehicle.
In Georgia, a buyer must be a licensed rebuilder in order to purchase a salvage vehicle. While in Nevada, vehicles are titled as rebuilt even if they weren’t previously salvaged. Nevada’s rebuilt title designation indicates that a vehicle has had a major component replaced such as:
Cowl - (Space between car hood and windshield where wipers are located)
Adding a major component to the frame
Complete front inner structure
Once repairs have been made to a salvaged vehicle, the rebuilt vehicle must be inspected by a body shop licensed by the state. If the shop determines the salvage title car is safe for operation, the vehicle owner can exchange their salvage title for a rebuilt title.
Should You Buy a Rebuilt Title or Salvage Title Car?
There are risks associated with rebuilt title cars.
Safety Risks: The main downside to buying a rebuilt title car is the inherent safety risk. Even if the car has been completely rebuilt and passed an inspection, it may not have been repaired well. There may also be significant structural damage that can’t be properly repaired. Lastly, flood-damaged vehicles may not have visible damage at the time of inspection, but the water damage can reveal itself over time.
Limited Insurance Coverage: Many car insurance companies don’t offer policies to cover rebuilt title cars. Or, policies will only include limited coverage that doesn’t include collision and comprehensive coverage. However, some insurers do offer full coverage, but the rates are likely very expensive.
Difficult to Finance: Many major banks will also not finance rebuilt title vehicles.
Voided Warranty: When a vehicle is designated as salvage or rebuilt, it’s manufacturer warranty is voided. That means you would have to pay for major repairs even if the car is almost new.
Low Resale Value: When it comes time for you to sell your vehicle, it will have a low resale value. Additionally, some dealerships don’t buy rebuilt title vehicle cars, so you might have difficulty unloading it.
There are also advantages to buying a rebuilt title car:
Documented Repair Work: Seller’s of rebuilt cars should have the carefully documented repair work that was needed to have the title issued. In many cases, this repair work provides more information on maintenance than what is typically provided in used car transactions.
Significant Discounts: Cars with rebuilt titles sell for far less than those with clean titles and can have discounts of up to 50%.
How to Know If a Car Has a Rebuilt Title
Before purchasing a used car, you should always get a vehicle history report from Carfax or Autocheck and run a VIN check. One tool, the iSeeCars free VIN Check, provides a comprehensive analysis that answers all the key questions shoppers should ask before purchasing a used vehicle.
The iSeeCars VIN Check provides detailed title information when provided by the state’s DMV. It will indicate if the vehicle has a clean title or if it has a rebuilt or another type of branded title.
The report also links to CarFax or AutoCheck vehicle history reports, which are often free. The vehicle history report includes detailed information about the vehicle’s title. For example, if a rebuilt certificate was issued after an accident, the vehicle history report will provide details about the accident. Or, if the vehicle was stolen or damaged in a natural disaster, that will be indicated as well.
If a car deal seems too good to be true, you should do your research to see if it has a rebuilt title.
The Bottom Line
Buying a car with a rebuilt title comes with many risks that likely outweigh the savings. However, there might be a rebuilt vehicle that was properly repaired or only had minor damage. While it’s important to have a trusted mechanic inspect any used vehicle before purchasing, it is especially important if you’re considering a rebuilt car.
More from iSeeCars:
If you’re ready to take to the web for your own car buying process, you can search over 4 million new and used cars with iSeeCars’ award-winning car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars free VIN check report. You can also filter by title, ensuring the cars you find have clean titles.
This article, What is a Rebuilt Title?, originally appeared on iSeeCars.com.