What Is A Rebuilt Title?
5-minute readJanuary 20, 2022
Rebuilt title cars, sometimes referred to as R title cars, can save you a lot of money if you’re willing to look past the vehicle’s history. But what is a rebuilt title exactly, and how should you approach buying one of these vehicles? If you’re interested in purchasing a car with a rebuilt title, it’s important that you know where it came from, why it was salvaged and what the seller did to make it roadworthy. This guide reviews the factors you need to consider when purchasing these types of vehicles and how you can protect yourself from fraud.
What Does A Rebuilt Title Mean?
A rebuilt title, or reconstructed title, is assigned to a vehicle that has been salvaged and repaired prior to sale. The definition for rebuilt titles varies by state, and some states don’t issue rebuilt titles. Vehicles with these types of titles offer more transparency to buyers because the seller is upfront about their history. Many cars with salvage titles are title-washed and sold as if they were never in an accident or disaster, which is misleading to the consumer.
A car could have a rebuilt title for numerous reasons. The most common are that it was in an accident or a flood, fire or other natural disaster. Or, an insurance company determined that it wouldn’t be worth repairing and sold it to someone who restored it to sell.
What Is The Difference Between A Rebuilt Title And Salvage Title?
Every car with a rebuilt title once had a salvage title before restoration. The key difference is that a rebuilt title indicates that the vehicle was purchased by a third party that repaired it to make it operable again. In states that issue rebuilt titles, this is a way to protect consumers by alerting them that the vehicle was totaled prior to restoration.
Is It Safe To Buy A Car With A Rebuilt Title?
You might wonder, “Is a rebuilt title bad?” Not necessarily – buying a rebuilt car can be a safe and affordable way to get a vehicle. But, it’s important to exercise caution when considering salvage title cars or buying a rebuilt car. Some forms of damage to the vehicle might not be apparent when you purchase it, so you should have a mechanic inspect it. If a seller can't provide maintenance records and proof that it has undergone a rigorous inspection before being advertised for sale, you should probably walk away from the deal. That said, rebuilt title cars are much safer than salvage cars because they need to meet certain criteria before they can be titled.
How Does A Car Get A Rebuilt Title?
If a vehicle is damaged to the point of total loss, it receives a salvage title. Insurance companies consider it a total loss when the cost to repair the damage is greater than 70% of the vehicle’s cash value. Once a salvage title is issued, a third party purchases the vehicle and repairs it with the intention to sell it. In some cases, salvage vehicles that are beyond repair are sold for parts, and the parts are used to repair similar vehicles.
How Much Does A Rebuilt Title Affect Car Value?
The difficulty of selling rebuilt vehicles is that their value diminishes significantly with that label. Compared to a vehicle with a clean title, one with a rebuilt title could be worth 30% – 50% less, according to RebuiltTitle.org. Some car shoppers are willing to take the risk due to the savings, but you may need to be prepared to invest money in repairs if the seller didn’t fix it properly.
Should You Avoid A Rebuilt Title Car?
Your personal circumstances will determine whether a rebuilt title vehicle is right for you. Consider the following advantages to buying a rebuilt car:
- You can save a lot of money
- Reputable sellers will put these vehicles through a rigorous inspection to show they are safe and operable
- Sometimes, the damage to the vehicle is purely cosmetic, which means the engine, transmission, frame, fuel lines and other key components are still good
There are possible downfalls to purchasing a car with a rebuilt title, however. You’ll need to consider the following before making a decision:
- The vehicle may have unsightly dents or hail, flood or fire damage
- You might not be able to sell the car or trade it in easily later on
- Some insurance companies refuse to insure cars with rebuilt titles, so obtaining insurance could be difficult
- These vehicles are sold as-is, so if the repairs were not performed properly, you have little to no legal recourse
Given the vehicle’s damage history, there’s no way to guarantee it's safe. The best course of action is to have it inspected by your own mechanic before completing the purchase. Be thorough when asking questions about any used vehicle, and be prepared to walk away if the seller won’t provide the information you require.
Questions You Should Ask About A Rebuilt Title Beforehand
To make an informed buying decision, you should ask the seller the following questions:
- How was the vehicle damaged, and how intense was the damage?
- What standards were used in the rebuilding process?
- Can I see evidence of the repairs?
- Has a certified professional inspected the vehicle?
- Will you allow the vehicle to undergo inspection before sale?
- What's the reason the car was salvaged and rebuilt?
You shouldn’t purchase the vehicle without first investigating it yourself. When you look at the car in person, check for signs of flood or fire damage. The telltale indications are debris in the trunk, uneven wear on the tires, mud or mold in the glove compartment, wet upholstery and a foul odor. During your visual inspection, make sure to check the fuel lines and see if the air-bag light is working properly.
Checking the vehicle’s history online will also give you an idea of whether it's worth the investment. You can use VINCheck, Carfax, Kelley Blue Book or the National Motor Vehicle Title Information System to check whether it was in any accidents or natural disasters. Knowing this information can reveal how forthcoming the seller is about the car and whether they're trying to hide anything.
Will My Insurance Cover A Rebuilt Title?
Due to the nature of rebuilt title cars, a lot of insurance companies offer limited coverage or refuse to cover them altogether. You may need to settle for liability coverage only, which means the insurance company won’t cover any damage to your car. The primary reason that insurance companies try to avoid insuring these vehicles is that there’s no guarantee they're safe or roadworthy.
If you’re having difficulty getting insurance, you can provide proof of restoration from the seller’s mechanic or compare insurance quotes to see how much coverage you’re offered. Make certain that you can insure the car prior to purchase since it’s illegal to drive without coverage.
The Bottom Line: Do Your Homework When Buying A Car With A Rebuilt Title
A rebuilt title is an indication that the vehicle you’re purchasing has had considerable damage and has undergone repairs before the sale. While you can save a lot of money on these cars, you’re not guaranteed a vehicle that’s safe or reliable. In many states, sellers are required to state in writing that a vehicle has a rebuilt title. If you buy a rebuilt title car and later discover the seller committed fraud by not performing the repairs they claimed to, you should report the incident to the Federal Trade Commission.
Inspecting a vehicle for damage is only one skill worth having when shopping for a used car. Learn more about successful used car shopping to get the best deal.
Table of Contents
Viewing 1 - 3 of 3
Best Used Cars, Sedans And SUVs To Buy In 2021-2022
There are so many options when looking to buy a used car, but some hold up better than others. Here are the best used cars you can find in the market.
How To Buy A Used Car: A Step-By-Step Guide
Buying a used car can be an exciting and smart way to obtain a reliable vehicle. Here are some steps to buying a used car.