American Auto Mart Monthly Blog

ByDoug Demuro
https://www.autotrader.com/

If you're buying a used car, you might see the phrase "rebuilt title" in the listing. What exactly does this mean? Did the title get rebuilt, or does this refer to the car? Regardless of the definition, how might this kind of issue affect the vehicle?

Before learning about rebuilt car titles, it's good to know a bit about a couple of other types of titles. If a car drove a normal life with no serious accidents, never had its odometer rolled back, and the manufacturer never bought it back because of a defect, it's said to have a clean title. That title is free of any title brands that denote special status and warn potential buyers of a possible problem or issue with the car.

Suppose a car had an accident and is declared totaled (a total loss due to accident damage) by an insurance company. In that case, a salvage title replaces its clean title. The salvage title lets potential buyers know that the car experienced an accident and it may not be safe to drive.

Once a vehicle gets fixed after earning a salvage title, it's given a rebuilt title. In most cases, a rebuilt title is only provided after the car gets fixed and inspected by the state or jurisdiction that issues titles. If the repairs were satisfactory, the title is changed from "salvage" to "rebuilt" in order to reflect the repairs that were performed and note that the car is now fixed.

A vehicle's resale value is affected by the type of title it has. Cars with rebuilt titles sell for much less money than their clean-title counterparts. These cars can be good deals, provided certified mechanics rebuild the vehicle properly. The challenge for potential buyers is that much of the repair work isn't easy to inspect. If the price of any used car seems too good to be true, you should consider staying away from it.

Since a car with a rebuilt title has been in an accident severe enough to earn it a salvage title, you might think you should avoid it altogether. And you may be right. After all, such damage can be destructive to a car's structural integrity, even if repairs were comprehensive enough to earn this type of title.

But you shouldn't always avoid a car with a title that has been rebuilt. In some cases, these cars have been professionally rebuilt with a quality almost as high as the factory's standard. That means they should suffer no serious consequences compared to a vehicle with a clean title.

A big problem with buying a car with a rebuilt title is that there's no real way to know how well its repairs have been made. So, we strongly suggest having any car with a title that isn't clean closely checked over by a competent mechanic. Have them assess the damage and check to see how well the vehicle got repaired.

In general, we advise typical car shoppers to stay away from cars with rebuilt titles because they've been in major accidents. While it's true these cars were repaired, it's hard to know the quality of the repairs and the parts used. However, if the vehicle passes an evaluation from a trusted mechanic and the repair quality is excellent, buying a used car with a rebuilt title can be a great way to get a good deal on a used vehicle.

Another reason many consumers steer away from buying a vehicle with a rebuilt title is car insurance - or the difficulty of finding coverage. We suggest calling your insurance carrier to make sure they'll offer a policy for a car with a rebuilt title.

In many cases, insurance companies face trouble valuing a car with this type of title because it's challenging to evaluate the vehicle's pre-existing damage. Some companies may offer liability coverage. They might not want to offer comprehensive and liability coverage on a car whose integrity could be compromised and pose a risk on the road.