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How To Insure Cars With A Salvage or Rebuilt Title

Insuring salvage cars or vehicles with a rebuilt title can be tricky. Find out why some insurers charge higher rates or refuse to cover them.

mechanic repairing car with rebuilt title

Say you take a trip out to a used car dealership to look for a new car. You find several vehicles that would meet your needs. The only problem? When you look at the paperwork, you find that one of them has a rebuilt title. And the other has a salvage title.

You’re concerned, but you’re not sure exactly what that means. Should you walk away? Use the status of the title as a bargaining chip? Just pull the trigger? This article is meant to help drivers learn what these title statuses mean. And how to get proper insurance for these cars.

Salvage Title vs. Rebuilt Title

There is a big difference between a salvage and rebuilt title. A salvage title means that the vehicle was totaled. This could be from a natural disaster, vandalism, or a car wreck. Once a salvage vehicle is fixed, it gets a rebuilt title. A rebuilt title means the once-salvaged vehicle is now in satisfactory condition.

What is a Salvage Title?

What does salvage title mean? Sometimes a car is damaged to the point where it costs more to fix than what it’s worth.

When this happens, the car is deemed a total loss, or “totaled,” by your insurance company. This will most likely happen if the damage is between 50 to 80 percent of the actual cash value of the vehicle. Each state has their own laws on how to decide whether a car is totaled.

Your insurer will take possession of your totaled car and. They'll sell it to a salvage car lot or someone who will rebuild it. Of course, your insurance provider will pay you for the car. You'll be paid the actual cash value of the car in its current condition. Or they'll replace your car with one worth about the same amount.

Wherever the car ends up, it gets registered as having a “salvage” title. This title will let potential buyers know that there has been major damage done to the car.

What is a Rebuilt Title?

What does rebuilt title mean? If a car with a salvage title gets repaired, its title changes to “rebuilt.” In order to obtain this change in status, the car must go through a thorough inspection after it’s repaired.

It's prudent to get a second opinion from a trusted mechanic before purchasing a vehicle with a rebuilt title. When a vehicle is badly damaged, it can be tough to return it to its previous condition.

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Should you buy a car with a salvage title?

Purchasing a Salvage Car

Many people are keen on the idea of purchasing a salvage title car for the sole reason that it’s cheap. While salvage vehicles are cheap, they typically require a lot of fixing up, which can be costly. It may even push the total vehicle cost above what a non-salvage vehicle would cost.

Buying Salvage Car Insurance

Insuring a salvage car can be tricky. Some insurers will issue you a policy, and others won’t. Some may increase your premiums.

The best way to ensure that you’re getting the lowest rates is to shop around and compare car insurance quotes.

Repairing a Salvage Car

When purchasing a salvage vehicle, be prepared to put in some money to get it up to snuff. You might want to start by trying to get access to the repair estimate the salvage lot had. Depending on who you're buying the car from, they may or may not have repaired any of the damage yet.

The estimate will show you how much damage needs fixing before you fully commit to buying the car.

The bottom line is that you'll be purchasing a salvaged car, repairing it, and getting it a rebuilt title. Depending on your state, you may or may not be able to drive a salvaged car on the road. Check with your state insurance commissioner to learn more.

Should you buy a car with a rebuilt title?

Purchasing a car with a rebuilt title

Buying a car with a rebuilt title means that the damage sustained by the vehicle has been repaired. Vehicles must pass a thorough inspection before their title may be changed. However, no inspection is foolproof. You should consider getting a second opinion to ensure the vehicle was rebuilt properly.

But there's a big reason people are willing to consider buying cars with rebuilt titles. Cars with rebuilt titles are much cheaper than used cars that haven't been totaled.

Keep in mind that it's harder to sell a car with a rebuilt title than a regular used car. Remember that if you're trying to decide between buying a car with a rebuilt title or a regular used car.

Buying Auto Insurance for Cars With a Rebuilt Title

Just like insuring a salvage vehicle, vehicles with a rebuilt titles have their own insurance rules. You'll most likely be able to purchase liability and collision coverage without a hassle. However, it might be more difficult to obtain full insurance coverage. The reason is that it's difficult to know how much a car with a rebuilt title is worth.

Since nearly every state requires liability insurance at the bare minimum, this can make your new ride unusable.

If you're having trouble finding the coverage for your rebuilt vehicle, don't give up. Shop around and compare rebuilt title insurance quotes from multiple companies. This is the best way to find an insurance company willing to insure rebuilt vehicles at the lowest rate.

Precautions to Take

Purchasing a salvage or rebuilt car can be a big job. It's important to make sure you're taking every precaution, before buying the car. For example, if you're buying a car with a rebuilt title, you should check into its accident history. You'll want to find out how it came to be salvaged, and where and how it was repaired. To avoid fraud, make sure the previous owners reasoning for the car being salvaged is accurate. You also want to make sure that the vehicle hasn’t suffered any hidden damage.

Frequently Asked Questions

Q: Should I buy car with a rebuilt title?

A: That depends on how much risk you're willing to accept. Other factors to consider are:

  • What happened to the car?
  • How extensive was the damage?
  • Who repaired the vehicle. Are they certified?
  • Are the repairs under warranty?
  • Is the price discounted enough to make buying the car worth the risk?

Q: Does a rebuilt title affect auto insurance?

A: If you buy a car with a rebuilt title, your insurance options could be limited. It all depends on your insurance company. Some insurers won't sell comprehensive or collision coverage if your vehicle has a rebuilt title. But you should be able to obtain basic liability for it. One positive is that rebuilt cars are cheaper than those with clean titles making them cheaper to insure.

Q: How do I get car insurance for my rebuilt vehicle?

A: You must first apply for a title change by going to your state Department of Motor Vehicles. You must provide your receipts from the repairs, the proof of inspection, and proof that you own the car. Depending on your state, you may or may not have to provide more information.

After getting the change in title approved, make sure your insurance company will cover cars with a rebuilt titles. Your best bet is to shop around and compare car insurance rates on your new vehicle.

Q: Where can you purchase a salvage car and what do you need to do before you buy?

A: Check out a salvage car lot, or even a private vendor when thinking about buying a salvage car. Once you locate a lot, keep in mind a few things before you purchase the vehicle.

Always check for extreme damage that's on the brink of being beyond repair. If you find any, get an estimate before you buy a salvage car. Also check with your insurance company on how they feel about insuring salvage or rebuilt vehicles. You might also check if your bank will loan you money to fix a salvage car.

These safety precautions could help save you a fortune.

Q: What is a "BRANDED TITLE" for an automobile?

A: The title of a vehicle is branded if it's been:

  • Salvaged
  • Junked
  • Rebuilt
  • Reconstructed
  • Submerged in a flood
  • Burned in a fire
  • Odometer tampered with
  • Manufacturer buyback (Lemon Law)

Q: Can I get "Salvage" or "Rebuilt" removed from my car's title?

A: Not legally. Once a car has been declared "Salvage" you can repair it and relabel it a "Rebuilt" vehicle. This may seem like a hassle, but it's for everyone's safety.

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