Rebuilt or salvage titles are given to vehicles that have been repaired and repurchased after the insurance company declared them a total loss. It can happen after an accident or a natural disaster that causes extensive damage to the car. After the vehicle has been repaired and purchased from the insurer, it can be sold under a salvage or rebuilt title.

When you’re looking for a used car, you may come across one that has a rebuilt title or a salvage title. These vehicles will usually have a sticker price lower than the average. While you might be able to get a great deal on a rebuilt or salvage title car, you should remember that the vehicle has been repaired after it was declared to be a total loss. These vehicles may be the perfect fit for a buyer. However, you should understand their full features before purchasing one.

What is the difference between a salvaged title and a rebuilt one

Here is a closer look to help you understand what each title means:

What is a salvaged title

When the vehicle’s total value is less than its repair costs, a salvage title will be issued. It usually happens when the insurance company declares a vehicle unrepairable. Accidents, weather damage (especially flooding), and theft are some of the main reasons for a car to have a salvage title. The extensive damage to the vehicle may make it unsafe to drive.

What is a rebuilt or re-titled title

A rebuilt title can be issued to a vehicle that has a salvage title. The buyer is informed of the history of the car. In some states, the vehicle has to pass several tests before it can receive a rebuilt certificate. In some states, however, it may not be necessary to tell prospective buyers about the vehicle’s past.

How can a vehicle get a title of salvage or rebuilt

The insurance company can declare a car a total loss if it has extensive damages and repairs amounting to 70%-90% of the value of the vehicle. A state motor vehicle agency will then change the title of the car from clean to salvage or junk. Once you receive a salvage title for your vehicle, it is not possible to drive, sell, or register the car until repairs are completed.

The salvage vehicle will then be sold to a third party interested in repairing it or dismantling it for parts. The car must pass safety standards before the motor vehicle agency of the state can give it a rebuilt license. The buyer will have more information on the vehicle’s history if the rebuilt title is given.

What is the effect of a rebuilt title on the value of an automobile

The market value of a vehicle with a rebuilt title is likely to be lower than a similar model that has a clean title. This is because the vehicle suffered significant damage. A car with a rebuilt title could have 20 to 40 percent less value compared to similar models that had clean titles. This can amount to thousands of dollars.

Should you purchase a vehicle with a rebuilt title

It depends on your circumstances. It could be a great deal to buy a car with a rebuilt title. In some states, a vehicle must pass a rigorous inspection to be eligible for a rebuilt title. The resale price could be lower because the car was previously titled as salvage. You could make a significant saving.

There could still be some downsides. The fact that a car has passed a state inspection doesn’t mean it is safe. It may also be hard to obtain insurance for your car. If you are planning to sell the vehicle, even if it is a great deal, it will probably not be worth as much as a car with a clear title.

It may be even harder to sell a vehicle with a reconstructed title than one with a clear title. Rebuilt titles can be a red flag for buyers because they usually mean that the car has been involved in an accident or was even totaled. Rebuilt titles can cause potential buyers to be cautious when investing their money in a vehicle.

Before buying a car with a rebuilt license plate, you should consider:

The vehicle damage

Damage extent

Repair process and location

If a certified or professional mechanic inspected the vehicle

If your insurance provider will cover a car with a rebuilt certificate.

The fact that a vehicle has a rebuilt title and passed the state examination doesn’t guarantee its safety over time. Do your research before choosing a car. Examining the frame and alignment of the vehicle can be a good way to determine if the car is worth the money. If the vehicle has a lot of external wear, it could be a sign of a lemon. A car that has not been aligned can also cause long-term problems. It is also important to have a professional mechanic check out the engine.

Insurance with a rebuilt or salvage title

In many cases, salvage title insurance is difficult to obtain because the vehicle in question may not be safe to drive. Rebuilt title insurance, however, is more easily available, though certain conditions will still be in place.

Some insurers will only cover liability even after repairs have been made. Many auto insurance companies do not offer full coverage on salvaged or rebuilt vehicles because it’s difficult to determine the extent of pre-existing damages. Collision or comprehensive, both of which are optional for standard auto policies, are unlikely to be included with this title.

A rebuilt title indicates that the vehicle has been damaged and is not in its original, pristine state. Therefore, its value will be much lower. Insurance companies may also consider a rebuilt title to be more risky because of the possible undisclosed damage.

You may be able to take additional steps after you find an insurance company that will insure your car with a rebuilt certificate. You may be able to provide further information to your insurance company to prove that a vehicle with a rebuilt certificate is insurable. You will need a mechanic’s statement stating that the car is in good condition. Also, you will need pictures of its current situation as well as repair receipts.