What Is a Rebuilt Title and Should I Buy a Car With One?

When a car suffers extensive damage from a collision, fire or flood, or is even a manufacturer buyback following a successful lemon-law claim, it often gets a salvage title. Some salvage cars get rebuilt into complete, running and driving vehicles, at which point, that salvage title can be replaced with a rebuilt title. Rebuilt cars often come with cut-rate prices that reflect that status, so it may be tempting to buy one — but should you?

Related: What Is a Salvage Title and Should I Buy a Car With One?

Title designations like salvage and rebuilt vary from state to state, and it can get confusing. Some states give certain circumstances their own titles, resulting in state-specific designations like flood or lemon titles, but not all states issue rebuilt titles, which is one of many differences that can create problems for used-car shoppers. Such inconsistencies make it simpler for salvage and other undesirable titles to be washed (that is, altered through unscrupulous means) to hide a vehicle’s rocky history from potential buyers. However, in the case of rebuilt titles, varying standards mean that there’s no guarantee a car bearing such a brand will be safe or reliable.

That being said, a car with a rebuilt title has one thing going for it: At least you have a clue what you’re getting, unlike former salvage cars that have reemerged on the market with washed titles. Carfax estimates that there are about 630,000 title-washed vehicles on the road, making a car with a rebuilt title look like the picture of transparency. Here’s what you should do before purchasing one.

Ask Your Insurance Agent

Some insurance companies won’t offer full coverage on rebuilt-title cars, if at all, though it might depend on the vehicle in question. If no insurer will touch the vehicle, you shouldn’t either. In most states, uninsured cars can’t be registered and driven legally anyway.

Proceed With Extreme Caution

If you choose to proceed, you have as much work to do as the average used-car shopper, and arguably more.

Different types of damage can result in a salvage title, and that includes cosmetic damage. When a car is totaled, it means an insurance company concluded that the car wasn’t worth the cost to repair. That doesn’t always mean it was irreparable, though, and insurance adjusters don’t always get it right. A sharp-eyed rehabber might recognize an opportunity to take on the repair themselves and put the effort into rebuilding a salvage vehicle for resale.

There’s still no guarantee that the repairs were done properly, however, and buyers of rebuilt-title cars often have no legal recourse if they weren’t, even in the best of circumstances. Even with a vehicle that proudly wears its rebuilt title as if it has nothing to hide, there are still opportunities for fraud. Because insurers may declare vehicles total losses at least in part due to cosmetic damage, you may find some dirt-cheap rebuilt vehicles that work fine but merely look beat up. That said, unrepaired body damage shouldn’t make you drop your guard about other aspects that have been damaged and repaired (or not). In some states, salvage cars have much lower hurdles to clear before receiving a rebuilt title.

Get as Much Information as Possible

The more you can determine what led the vehicle to be totaled and the repairs it received, the better off you are to decide if a rebuilt title is worth the risk. Start by asking the seller. The less he or she knows, regardless of the reason, the higher the risk to you.

Take advantage of free (VINCheck) and for-a-fee services (Carfax, AutoCheck and the National Motor Vehicle Title Information System) to see if you can find information about the vehicle’s original state and history. You might find evidence of its earlier branding, be it a lemon, water or hail damage, odometer rollback or salvage. We flatly recommend against flood vehicles because flood damage can take months or years to surface.

All of these steps can help rule out bad vehicles. Unfortunately, nothing can truly give a rebuilt car a clean bill of health. Some vehicles slip through the cracks without proper titling, not all damage shows up in history reports, some titles get washed and some criminals go to great lengths to cover up things like odometer fraud. By doing some digging, you can greatly improve your odds.

We believe a pre-purchase inspection by an independent professional mechanic of your choosing is crucial for any used car, and that goes triple for a rebuilt one. If the seller refuses, do not proceed. Though these inspections average in price between $132 and $200, it’s worth the money in the long run, even if you have to do a couple of them to find the car you ultimately buy. Do the free and cheap research first and save roping in a professional’s opinion for the finalists.

Expect a Low Price Regardless

Even in the best circumstances, a vehicle with a rebuilt title is worth less than a normal one, and that’s what you should insist on paying. We can’t give you a target discount because there are too many variables, but most salvage and rebuilt cars sell for considerably below market value. Note that repairs can raise a car’s value, but rebuilt and salvage cars are difficult to resell, period — and dealerships might not accept them for trade-in.

Buying any used car involves risk. Even if you do everything you’re supposed to do and the car’s history has been faithfully recorded and made available to you, an older car can develop costly problems, possibly out of warranty. A rebuilt car might seem attractive if you think you know its full story and can get it insured, but go into it with your eyes open and demand an excellent deal.

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• How to Buy a Car, According to Cars.com Experts
• What to Ask When Buying a Used Car: 8 Key Questions
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