A salvage title and a rebuilt title both tell you that a car has been through some serious damage.
If an insurance company decides a vehicle is a total loss, it gets a salvage title. If that vehicle is repaired and passes inspection, its title changes to “rebuilt.”
It’s important to understand the differences between a rebuilt title vs salvage title if you’re shopping for a car. Both come with risks and rewards you need to weigh.
This article is your guide to understanding salvage and rebuilt titles, including what they mean, the risks and benefits of buying a car with either, and how to do your homework before you buy. A seller should always be upfront about a vehicle’s history, especially if it has a rebuilt title.
What Does Salvage Title Mean?
A salvage title means that a vehicle has been damaged so badly that it would cost more to fix than it was worth before the damage happened. The cutoff point is often around 75% of the vehicle’s fair market value.
Vehicles get salvage titles when they’ve been wrecked in an accident, flooded, or caught fire. Tropical storms, hurricanes, and widespread flooding are a common cause of salvage titles.
State laws about salvage titles vary, including the words they use and the specific damage criteria. For example, California issues salvage certificates instead of salvage titles. South Carolina has distinct definitions for salvage titles based on whether the damage was caused by flood or fire.
If you’re thinking of buying a car with a salvage title, it’s a good idea to check with your state’s Department of Motor Vehicles (DMV) so you know the specific regulations.
Cars with salvage titles usually can’t be driven until they’ve been repaired. Insurance companies usually don’t offer coverage for cars with salvage titles.
What Does Rebuilt Title Mean?
Okay, so a car has been declared a total loss and given a salvage title. But what happens if someone fixes it up? That’s where a rebuilt title comes in.
Basically, a rebuilt title means that a vehicle with a salvage title has been repaired and has passed a state inspection. The inspection is there to make sure the car is safe to drive.
However, it’s worth keeping in mind that even if a rebuilt vehicle passes inspection, there could still be some lingering problems. Plus, a car with a rebuilt title is usually worth less than one with a clean title. If you’re thinking about buying a car with a rebuilt title, make sure the seller is upfront about everything.
Getting insurance for a rebuilt vehicle can sometimes be a little tricky. You might find that your coverage options are limited, or that you have to pay a higher premium. But it’s definitely possible to insure a car with a rebuilt title, and you can often find good deals through online insurance brokerages.
Salvage vs. Rebuilt Titles: What’s the Difference?
The biggest differences between a salvage title and a rebuilt title come down to roadworthiness, insurability, and resale value.
Roadworthiness
A vehicle with a salvage title isn’t considered safe to drive on public roads until it’s been repaired and inspected. A car with a rebuilt title, on the other hand, has been repaired, inspected, and declared roadworthy by the state.
While a salvage title car might be cheaper initially, keep in mind that you’ll be responsible for all the repairs needed to get it back on the road. Buying a car with a rebuilt title is technically a better option because someone has already done the work of fixing it.
Insurance Availability
You typically can’t get insurance for a vehicle with a salvage title. However, it is possible to insure a car with a rebuilt title, although your options may be limited, and the premiums might be higher.
Using an online insurance marketplace can save you time and money by allowing you to compare quotes from different insurers and potentially find discounts.
Resale Value
Both salvage and rebuilt titles will lower a vehicle’s resale value compared to a car with a clean title. Rebuilt title vehicles typically sell for a bit more than salvage title vehicles, but expect a lower price than you would get for the same car with a clean title.
Risks and benefits of buying a vehicle with a salvage or rebuilt title
Buying a car with a salvage or rebuilt title can be a gamble. Here are some of the things to consider:
Potential Benefits
- Lower Purchase Price: The lower price tag is probably the biggest draw. You can often get a car with a salvage or rebuilt title for significantly less than a similar car with a clean title.
- Repair Opportunity: If you’re mechanically inclined (or know someone who is), a salvage title can give you the chance to fix up a vehicle exactly the way you want it.
Potential Risks
- Hidden Damage: Even if a rebuilt vehicle looks great on the surface, there could be hidden damage or underlying problems that you won’t discover until later. This can translate to more frequent trips to the mechanic.
- Resale Value: When it’s time to sell, you’ll likely get less money for a car with a salvage or rebuilt title compared to one with a clean title.
- Insurance Challenges: You might have trouble getting full coverage insurance, or you could face higher premiums. Keep in mind that insurance companies may be wary of insuring a vehicle that’s been declared a total loss at some point.
Important Considerations
Vehicles with salvage titles could have long-term issues, and even a car with a rebuilt title could be hiding internal problems. Before you buy, weigh the potential savings against the possible headaches down the road.
Due diligence: Inspection and research
Whether you’re considering a vehicle with a salvage title or a rebuilt title, it’s critical to do your homework. Here are some steps you can take to protect yourself from buying a car that’s unsafe or unreliable.
Vehicle history report
Start by getting a vehicle history report from a source like Carfax or AutoCheck. These reports can show you a vehicle’s accident history, title issues, and any other red flags you should know about.
Thorough inspection
Next, give the car a thorough once-over, looking for signs of shoddy repairs or hidden damage. If you’re not mechanically inclined, it’s well worth it to pay a qualified mechanic to perform a pre-purchase inspection.
If you’re buying a rebuilt vehicle, ask the seller for documentation related to the accident, proof of payment for all repairs, and any photos or videos that show the extent of the damage. An honest seller should be willing to provide these things.
Questions to ask the seller
Ask the seller detailed questions about the vehicle’s history, how extensive the damage was, and exactly what the repair process involved. Be very wary of sellers who seem evasive or are unwilling to provide details.
State regulations
Finally, check with your state’s Department of Motor Vehicles (DMV) to learn about any specific regulations regarding salvage and rebuilt titles. Regulations vary from state to state, so it’s important to know the rules in your area.
Frequently Asked Questions
Are rebuilt titles hard to insure?
It can be. Some insurance companies are hesitant to insure vehicles with rebuilt titles due to the history of significant damage. You might find fewer coverage options or higher premiums compared to a car with a clean title. It’s best to shop around and get quotes from multiple insurers.
How do I turn a rebuilt title to a clean title?
Unfortunately, you can’t. A rebuilt title will always remain a rebuilt title. It signifies that the vehicle was once declared a total loss, then repaired and inspected. The title will never be “clean” again, even if the repairs were extensive and professionally done. It’s a permanent part of the car’s history.
Is a rebuilt title better than a salvage title?
Yes, a rebuilt title is generally better than a salvage title. A salvage title indicates the vehicle is considered a total loss and cannot be legally driven. A rebuilt title means the vehicle has been repaired, inspected, and deemed roadworthy by the state, making it legal to drive.
Is it safe to buy a car with a rebuilt salvage title?
It can be safe, but it requires careful due diligence. Have a trusted mechanic thoroughly inspect the vehicle to assess the quality of the repairs. Also, be aware that the car’s resale value will likely be lower than a comparable car with a clean title. Transparency and a pre-purchase inspection are key.
Conclusion
A salvage title means a vehicle has been deemed a total loss by an insurance company, usually due to significant damage. A rebuilt title means that vehicle has been repaired and passed inspection, allowing it to be legally driven again.
If you’re considering buying a car with either a salvage or rebuilt title, proceed with caution. Thorough research is essential, as is a pre-purchase inspection by a qualified mechanic. Transparency from the seller is also key; they should be upfront about the vehicle’s history and any known issues.
Buying a salvage or rebuilt vehicle can be a way to save money, but only if you’re fully aware of the potential risks. Make sure the vehicle is road-legal and safe to drive before you commit to buying it. With due diligence, you can make an informed decision and avoid costly surprises down the road.