If you've been in the market for a used car, you've probably stumbled across the term "rebuilt title."
How does a car with a rebuilt title differ from any other? Basically, it means the car had previously been damaged to the point where it was no longer worth repairing.
Insurance companies generally consider a car "totaled" if it is 50% to 80% damaged. That’s when it is issued a salvage title. Once the car is fixed, it's given a rebuilt title.
As you might imagine, there are both pros and cons to buying a vehicle with a rebuilt title. We break down the eight things you need to know about buying a rebuilt or reconstructed car below, including:
- Buying a rebuilt car may save you money
- Your reconstructed vehicle passed an inspection
- You could have a hard time selling a car with a rebuilt title
- Make sure your insurer covers rebuilt cars before buying one
Buying a rebuilt car will save you money — maybe
When you buy a rebuilt auto, you'll probably spend less than you would if you bought a new or used vehicle. But just because your initial payment is low, that doesn't mean the car will be less expensive overall.
If you don't have the car inspected, you may end up with one that needs major repairs. And that could mean a major hit to your wallet.
Your reconstructed car passed an initial inspection
Some people might be wary of buying a car that was once salvaged. In order to get a rebuilt title, though, a car often has to pass a state inspection. As long as it is safe and runs well, buying a car with a rebuilt title could save you hundreds of dollars.
Exactly how much could you save by buying a rebuilt or reconstructed car? Fifty percent, according to Jason Shackelford, owner of Stingray Auto Repair in Redmond, Wash. Of course, this amount depends on several factors, like the popularity of the vehicle, the damage done to it and how well it was repaired.
You still need a second opinion
Most cars must pass an inspection before receiving a rebuilt title. Have your own mechanic take a look before buying it anyway. Consumers often are dazzled by a rebuilt car’s exterior, not realizing it needs major repairs.
"Always have the car inspected by a shop with experience handling vehicles with rebuilt titles before purchasing," Shackelford said. “A shop without the proper experience may not know what to look for.”
Remember, all cars with rebuilt titles were once damaged to the point they were inoperable. Make sure the mechanic looks closely at everything before signing off on the car. Someone could always repair it and then remove the new parts they added after receiving the rebuilt title.
Always ask for documentation
If your car was repaired, there should be documented evidence of the work done to get it running again. If the person selling the car refuses to give you this paperwork, run! Anyone trying to sell a reputable rebuilt vehicle won’t mind providing documentation.
"Ask for receipts from the repairs and ensure the repairs were done by a reputable facility, not in Uncle Joe’s backyard," Shackelford said.
Two more ways to get your auto's history are from the Department of Motor Vehicles (DMV) or AutoCheck.
It's important to know why your car was salvaged and how it was repaired. For example, it could have been rebuilt with older parts from other totaled vehicles. While it may run properly, because it was fixed with spare pieces, you will need to carefully maintain it.
You may have trouble selling your rebuilt car
Owners of cars with rebuilt titles need to maintain them carefully. Because these types of vehicles can be problematic, they're often difficult to resell. And if you do end up selling yours, chances are you won't make much of a profit.
How to insure a car with a rebuilt title
Some car insurance companies won't insure a car with a rebuilt title. Others will insure them but won’t offer full coverage. This is because it is typically difficult to figure out the real value of a car that’s been rebuilt.
Since every state except New Hampshire requires drivers to have liability insurance, this can make your new ride undrivable.
"The biggest challenge of owning a car with a rebuilt title is insurance can sometimes be difficult to obtain. And the resale process can be more tedious, as most car dealerships won't take a rebuilt vehicle as a trade-in," Shackelford said.
If your insurer refuses to cover your car because it has a rebuilt title, there are still options. Shop around and compare quotes to find an insurance carrier that will cover vehicles with rebuilt titles.
Find auto insurance for a car with a rebuilt title.
Ask these questions before buying a rebuilt vehicle
- How was the car damaged?
- How extensive was the damage?
- How was the vehicle repaired and who did the repairs?
- Is the frame properly aligned?
- Has a certified mechanic examined the car?
- Will my insurance company cover a car with a rebuilt title?
Check to see if the car is a lemon
Besides asking plenty of questions when you're shopping for a vehicle, there are other signs your dream car is a dud.
"It is all too common for repairs not to be made properly,” Shackelford said. “It is a good idea to look for panel fitment. The lines or gaps between the body panels are a sure sign of a good or bad repair. Also, the paint color from panel to panel should be an exact match, not off by a shade or two."
Consumer Reports warns that if you see any of the following on a car with a rebuilt title, think twice before buying it:
- Large dents or crunched fuel lines underneath the car.
- An air-bag light that doesn't work properly (this could be a sign it wasn't replaced correctly).
- Uneven tire tread.
- Hood, trunk or doors that won't close correctly.
"Certain types of damage to a vehicle should never be fixed,” like fire and flood damage, Shackelford said. "But more minor things, such as vandalism or suspension damage, [are] easily repaired."
Signs of flood damage to a vehicle include:
- Leaves, silt or sand in the trunk
- Mud or silt in the glove department
- Wet carpets
- Musty odor
- Air freshener or other scent used to cover up the smell of mold
"Buying a car with a rebuilt title [can go] great or turn into a nightmare,” Shackelford said. “There really is no middle ground, so buyer beware.”