What does rebuilt title mean?

A car with a rebuilt title was deemed a total loss by an insurance company but rebuilt to a roadworthy standard. It needs to pass an inspection from the state to get a rebuilt title

What does salvage title mean?

A car with a salvage title has been deemed a total loss by an insurance company and can’t be legally driven on public roads.

Is a salvage title bad?

Cars with salvage titles have been in severe accidents and usually can’t be driven on public roads. Only consider buying a used car with a salvage title if you intend to rebuild it to a roadworthy condition. The benefit is a significant discount compared to a used car with a clean title.

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

A car’s title is a legal document showing the person or business who officially owns the vehicle. Most vehicles on the used market have a clean title, which means it’s never been deemed a total loss by an insurance company. However, you may have noticed used cars with rebuilt or salvage titles with lower price tags. Keep reading to find out what that means and the difference between the two.

Keep in mind that laws surrounding rebuilt and salvage titles vary by state. For further clarification, check with your state’s DMV website for details specific to where you live.

What is a Salvage Title?

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.

Since cars with salvage titles typically aren’t roadworthy, you should only consider buying one if you’re a mechanic with the intention of rebuilding it to pass a state inspection. Even then, consider the value proposition of rebuilding a car with a salvage title compared to just buying a used car with a clean title. The cost of the repairs might be more than the car is worth.

What is a Rebuilt Title?

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. For a vehicle to go from salvage to rebuilt, it needs to be inspected by the state and deemed fully functional and safe to drive.

A rebuilt title has considerable advantages over a salvage title. When you buy a used car with a rebuilt title, it’s ready to register, insure, and drive right away without much of a headache. That typically isn’t the case with a salvage title. It’s still important to do an in-person inspection of the car yourself before buying a vehicle with a rebuilt title.

How Do Cars Get Salvage and Rebuilt Titles?

A car gets a salvage title when it’s deemed a total loss by an insurance company. What is considered “totaled” depends on the insurance company; sometimes, a totaled car has no damage to the frame or engine. A vehicle with a salvage title is ineligible for license plates and cannot be driven on public roads.

When a car with a salvage title is repaired to roadworthy status, it can get a rebuilt title upon passing an inspection from the state. With a rebuilt title, you can register the car, put plates on it, and it becomes street legal again.

Will a Rebuilt Title Affect My Car’s Value?

Yes, a car with a rebuilt title will always be worth less than the same car with a clean title. A vehicle with a clean title has never been in an accident severe enough to be deemed a total loss by an insurance company. Even if a car with a rebuilt title is repaired to the highest standard, it will always have a nasty accident in its past, bringing down its cash value.

If you’re trying to sell a car with a rebuilt title, we regret to inform you that you’ll get less money than you would if it had a clean title. Potential buyers will likely have questions about the vehicle’s condition. The greater the transparency from you, the better the odds of attracting the right buyer and getting a relatively reasonable sale price.

Can You Get Insurance with a Rebuilt or Salvage Title?

Most insurance companies will insure a car with a rebuilt title, but you may not be able to get full coverage. If you have a clean driving record, there won’t be much insurance cost difference between a car with a clean or rebuilt title. Try to get a quote from your insurance company before buying the car, and make sure they know it has a rebuilt title.

In most cases, you cannot get insurance on a car with a salvage title because it’s not legal to drive on public roads.

Should You Buy a Car with a Rebuilt Title?

It depends — Not all cars with rebuilt titles are created equal. If you’re considering buying a car with a rebuilt title, ask the seller plenty of questions about the car’s past and the repair process.
Look for a transparent seller — If the seller can answer your questions satisfactorily, has a good knowledge of the car’s past, and can provide photos of the car after the accident and before the repairs, then it could be a car worth buying. If the seller is dodgy, walk away.
Know the risks involved — Even with an honest seller, there’s always a risk involved when dealing with a rebuilt title. There could still be an underlying issue caused by the accident that went unnoticed. If you’re unwilling to take that risk, then it’s worth paying a little extra for a similar car with a clean title.
Consider a professional inspection — When considering a car with a rebuilt title, it always helps to be mechanically inclined, so you know what to look for when looking it over in person. If you don’t know much about cars, then consider a pre-purchase inspection before agreeing to buy the car.

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?