Rebuilt Title vs. Salvage Title: What's the Difference?

Something that can be easy to overlook when shopping for a used car is the status of the title. A car’s title is a legal document that establishes the person or business that officially owns the car. It lists the VIN of the car, the state where it’s owned and various other important information. The status of the title can tell you a lot about the car’s history, but what does it mean when it has a rebuilt title or salvage title?

The default is what’s called a "clean" title. If a title is clean, that means there has never been a major accident claimed on the car. Two other common title statuses are "salvage" and "rebuilt." Sometimes these terms are used interchangeably, but from a legal standpoint, there are important differences between the two.

A salvage title is a title for a car that’s been in a major accident and has been deemed a total loss by an insurance company. However, the definition is not universal. States have different laws about what constitutes a salvage title, you can check your local state’s DMV website to learn more about the specifics where you live. Find a used car for sale near you

A rebuilt title is issued to a car that used to have a salvage title but has been repaired to a roadworthy condition. Although the title status is officially called "rebuilt," it does not necessarily mean the car has been rebuilt from the chassis up. In order for a car to go from salvage to rebuilt, it needs to be inspected by someone from the state and deemed fully functional and safe to drive.

What’s tricky about buying a car with a rebuilt title is you never truly know the extent of the damage it took in whatever accident happened that gave it a salvage title in the first place. Sometimes damage can be purely cosmetic, but be enough to be considered a total loss. You’ll want to have it looked at by a seasoned mechanic before deciding to make the purchase.

Another consideration is insurance. Some insurance companies won’t offer full coverage for a car with a rebuilt title. If you’re considering buying a car with a rebuilt title, check with your insurance provider first to ensure you can get at least some coverage.

As for salvage titles, you’ll definitely only want to get a car with a salvage title if you’re an experienced mechanic ready to take on a project. If you can successfully get the car in good enough condition to earn a rebuilt title, you could either flip it for a nice profit or drive it yourself and save a lot of money.

If you have reservations about buying a car with a rebuilt or salvage title, then stick with clean titles that you don’t have to worry about. But if you’re willing to take a risk to save a few bucks, then rebuilt and salvage cars can be a nice way for mechanically inclined shoppers to get a good deal.

2 COMMENTS

Peter Wright August 15, 2019 At 4:30 pm

On Salvage title vs Rebuilt in California based on my experience. Your write-up seems to be based more on opinion than fact and a simple disclaimer about differences in States does not excuse the author from spouting misinformation.

Folks in CA who read your article will be misinformed. A rebuilt title is not typically assigned to a salvage ‘title’ vehicle if ever. Words are important.

In California a vehicle declared a loss by an insurance claim is typically sent to auction. The better ‘losses’ are purchased by enterprising repair people and appropriate repairs are made. Then the CHP will issue a salvage certificate (Not title) only if they deem the vehicle roadworthy. Then the vehicle has to pass State safety tests. With these certificates (salvage and safety) the vehicle has to then pass an on site inspection at the DMV before it earns a salvage title(not certificate) from the DMV.

The afore described is a one time process. Once the Title is issued with a salvage ‘status’ it is bought, sold, insured, registered, etc. like any other vehicle. Same process applies to ‘losses’ that are theft recoveries in good condition. The term ‘salvage’ on the title at this point is no more than an historical footnote. Having owned several over the years I have never seen the ‘salvage’ status have any affect on the integrity of the vehicle, though the buyer should perform the same due diligence as on any used vehicle.

If anything a salvage status title is a green light to smart buyers as compared to a similar vehicle that was damaged, but never declared a ‘loss’ by an insurance company, and is back on the road with a ‘clean’ title status, without having to pass any of the tests that an insurance claim loss has to go through, at a much higher cost. Please do some fact checking and correct your article based on truth and fact.

- David O'Neill August 28, 2019 At 8:12 pm
  
  From the driver’s perspective then (after it’s repaired and inspected), is there no real differences besides insurance coverage then?