What Is A Rebuilt Title, And Should You Avoid Them?

///What Is A Rebuilt Title, And Should You Avoid Them?
(Last Updated On: June 22, 2018)

To buy or not to buy? When you’re looking at a car with a rebuilt title, that is the question. Moreover, the answer is that because no two salvage vehicles are exactly alike, the answer can be ?yes? or ?no? depending on the car.

You’re probably wondering, “What does a rebuilt title mean?” A rebuilt title, which is also called a ?salvage title,? is a term assigned to a vehicle by an insurance company when the car is deemed totaled.

Based on an insurance company’s criteria, a car must be at least a 50% loss to be considered totaled. The definition of ?totaled? varies nationwide, as each state sets its own evaluation criteria for determining when a car can no longer be used safely or adequately on the road. A vehicle that is declared a total loss by an insurance company cannot legally be driven and have a title status rebuild until it has been repaired and restored so that it’s once again capable of being safely operated. You can certainly get a good deal getting a car with a salvage title, provided it’s been appropriately restored. As you can imagine, getting a car with a salvage title can also become a nightmare if you’re not careful when making these deals. To make you a more savvy car shopper when you’re considering a salvaged car, we’ve created a guide to give you more information on what a salvage vehicle is and how to spot a good deal versus a situation you should run from.

What Is A Rebuilt Title?

Understanding what a ?rebuilt title?first requires knowing what a title is. A car title is a legal certificate that’s usually issued by a state Department of Motor Vehicles (DMV). Titles give an individual or a company the right to drive a particular vehicle lawfully. The title can be transferred if the vehicle’s ownership changes hands. It can also be revoked if the car is severely damaged, which is essentially the rebuilt title meaning. A car that’s considered unworthy of being on the road can be used for parts that are still functional. This typically happens if the vehicle is totaled to 80% or more of its retail value. Cars with expensive parts are also more likely to be parted out, as the cost of repairing them doesn’t make financial sense. However, sometimes an ambitious auto shop, or mechanically-inclined car owner, will decide to give the car a second chance at life. Instead of sending it to auto heaven, someone who knows how to rebuild a title will replace the non-working parts and give the vehicle a makeover to remove scratches, dents, chipped paint, and other aesthetic issues. Once the car has been restored to health, the owner can apply to get the car a rebuilt title. To be granted the title, the vehicle has to undergo a state inspection to make sure it’s fit for the road. As with any conventional vehicle, the requirements that salvage cars must meet to pass inspection vary depending on the state. If the car passes its legal inspection, the title status rebuild is deemed complete, and the vehicle can either be driven again by the original owner or sold to another person.

Are All Rebuilt Cars The Same?

You might think that once a car receives a rebuilt title, it’s good to go, and you’ve landed the deal of the century. However, the reality is, it’s not quite that cut-and-dry! Because they’ve been declared totaled for different reasons, comparing one totaled vehicle to another is like comparing apples and oranges. Many factors go into deciding whether a salvaged vehicle is worth buying, including the initial reason why it was declared totaled. Two of the biggest causes of having a car declared totaled are accidents and water damage, such as if the vehicle was underwater in a flood.

If your eye is drawn to a car with a rebuilt title, the first two bits of information you should get are why the car was declared totaled and who performed the repairs. In general, a car that was damaged in an accident might be worth pursuing, but you’re better off steering clear of a car that’s suffered water damage. We use the word ?might? because the degree of damage the car sustained in an accident can determine whether or not it’s worth getting. If the vehicle just had a few components damaged, a knowledgeable mechanic could very well replace the necessary parts, perform any aesthetic work needed, and get the car back in good shape again. If the damage is more extensive, however, you should be aware that there might be damage to other parts of the car that aren’t apparent. This is because accidents, especially rollovers and forceful collisions, can weaken the structural integrity of the vehicle’s frame. The damage is sometimes present even if it’s undetectable through a mechanical evaluation. You also run the risk of getting a car that was inadequately restored if the mechanic who made the repairs wasn’t experienced in performing salvage repairs. Therefore, you should figure out who worked on the vehicle, as an expert mechanic can restore a severely damaged car to excellent condition, but an inexperienced mechanic might not.

While there might still be hope for a car damaged in an accident, you should pass on a car that was totaled because of water damage. Water damage can create many problems, including directly or indirectly causing damage that might not show up for years. This is especially true for cars that have been damaged by salt water, as salt water corrodes the car’s interior and electrical components. Even if a repair shop tells you the car has been repaired from its water damage, the chances are good that the salt has already worked its way into the car’s vital systems. Because salt is so corrosive, even trace amounts that get into the vehicle can be disastrous. Salt is notorious for eating away at the car’s electronics, and it also causes rusting of the vehicle’s mechanical parts. Salt can also weaken the frame. This can be extremely dangerous for you, the driver, as it means the car might not hold up like it’s supposed to if you crash. Although it’s a less severe problem from a safety perspective, water can also corrode the car’s exterior paint. Again, this might not be something that shows up right away. Eventually, however, you’ll have to foot the bill for a car that needs to be repainted. Because of the severity and unpredictability that water damage causes, many insurance companies won’t insure a vehicle that was declared totaled because of water. You also face a higher financial risk in getting a water damaged vehicle since additional repairs might not surface for months or years down the road. If that happens, you may very well end up paying more for your used rebuilt vehicle than you would have to get a used or new car with a clean title.

How Do You Know If You’re Getting A Good Car Or A Lemon?

If the used car you’re considering shines and sparkles, it’s a sure sign you’ve found a great deal, right? Unfortunately, not always. When it comes to cars, there’s often much more than meets the eye. For that reason, we’re providing you with a standard checklist that covers what you should look for when you go to inspect a car with a rebuilt title (or any used car, for that matter).

  • Tires
  • Engine
  • Suspension
  • Transmission
  • Brakes
  • Steering
  • Frame
  • Interior
  • Exterior

Tires

Since the tires are one of the most significant components on a car, making sure they’re safe and still have life left is imperative before you sign the papers and drive away. Tires should not have excessively worn tread, and they should all have even wear. Uneven wear can indicate the presence of a more serious problem, such as suspension or alignment. The tires should all match, and they shouldn’t have any visible issues like cuts, cracks, or bubbles. The spare tire should be in the vehicle, and it should be inflated. The necessary equipment to change a flat should also be in the car and work correctly.

Engine

The engine should run smoothly and not produce any unusual odors when the car is running. The engine oil should be clear and not thick or dirty. The engine emissions should be neither blue (which may mean that the car is burning oil) nor black (which indicates the car is consuming oil).

Suspension

If you notice any creaking noises when the car corners, it may be a sign of a suspension problem. The car should also sit level when resting on even ground. Excessive vibration in one or more wheels can also mean that all is not well with the suspension system.

Transmission

When driving, the car should shift gears smoothly, regardless of whether it’s an automatic or a manual. The transmission shouldn’t make any grinding noises when the car is in reverse. Lastly, the transmission fluid should be clean and not sludgy or dirty.

Brakes

When stepping on the brakes, you shouldn’t notice any screeching or grinding noises. The wheels shouldn’t lock, and the car should continue driving in a straight line when you press down on the brake pedal. Remember to check the parking brake, too. It shouldn’t stick or lock when it is engaged or disengaged.

Steering

When the wheel is turned, there should be no resistance in the steering wheel. You also shouldn’t hear any clunks or clicking noises or feel any vibrations when turning the wheel. The car should stay in a straight line and not pull to either side when you’re driving.

Frame

When evaluating the frame, you shouldn’t see any indication of collapse or straightening in the trunk. The frame holes should look scratch-free and clear, and there shouldn’t be any dents or bends in the chassis.

Interior

Inside, there shouldn’t be any noticeable cracks on the seats. The doors and trunk should all open and close without hesitation. All the buttons and dials in the cockpit and dashboard should work properly. This includes the heat/AC, windshield wipers, radio, headlights, hazard lights, and power windows. The sunroof should open and close without a hitch, and there shouldn’t be any warning or service lights on in the dashboard. You should also make sure that the trunk opens and closes both with the key and from the interior. Be aware of any air fresheners or strong perfumed scents, as this could mean something is being covered up.

Exterior

On the outside, the car shouldn’t have any rust spots, dents, or significant scratches. The seams where the doors and trunks are should be tight-fitting and correctly aligned. The panels of the body should all match and line up. A fresh coat of paint may seem like a nice gesture on the mechanic’s part, as it will seem like he or she went the extra mile to make the car look presentable. This can certainly be the case, but it might also mean that the paint is being used to hide rust or other paint and body problems.

Checking For Flood Damage

If you are looking at a vehicle that you know has been totaled from water damage, there’s a second set of criteria that you should use to ensure the car is safe to drive. Here are some classic signs that a car has been damaged by water:

  • A strong interior odor
  • New carpeting that is discolored, loose, or doesn’t match the other interior colors
  • Water stains or moisture accumulation on the carpets
  • Rust spots around the dashboard, in the doors, around the pedals, or lining the latches and hinges of the hood and trunk
  • Silt build-up or mud spots on the seats and in the glove compartment
  • Thin or rusting wires beneath the dashboard
  • Moisture accumulation in the headlights, tail lights, instrument panel, and interior lights

Along with looking for visual abnormalities and strange odors, you can perform a test to check the car’s electrical system for signs of water damage. Some of these features and functions you’ll check regardless when looking at the car. To start, you should make sure that all the instrument panel and interior lights come on when you start the car. The exterior lights should all work too, and they should be clear and bright. The audio system should work correctly, as should the turn signals and wiper blades. The heat and AC should also come on when you start the car. The AC should get cold within a few minutes and stay cold. There should be no strange odors coming from the vents when you turn the AC on. If there is, it may mean that there is bacterial growth in the system. This is a problem that needs to be addressed immediately, as bacteria multiply quickly, and you might end up going from having a minor problem to a more major one in a short period. Finally, the engine’s oil should look clean, and there shouldn’t be any water in it. Water in the engine is a red flag, as it can cause severe damage to the engine and its components. Engine problems can quickly lead to suspension system problems, which is another nightmare repair.

This checklist is always useful to have on hand when you go to look at a car that’s been salvaged. Checking off the boxes will tell you pretty quickly whether or not the car is worth the money. Along with giving the vehicle a look-over yourself, you should also bring it in for an evaluation by a certified third-party mechanic. Your best bet is to find someone who is familiar with salvaged vehicles and their specific issues. Another advantage to bringing the car in for a mechanic’s inspection before making the purchase is that some dishonest repair people who know how to rebuild a salvage title will install new parts on a salvaged vehicle and take them out before making the final sale. A certified mechanic will verify that this didn’t happen to your car.

Are There Other Things To Consider Before Getting A Salvage Vehicle?

If all goes well with your inspection and that of your trusted mechanic, great! You’re one step closer to getting a used car for a good deal. However, even if the car checks out when compared to your checklist and the mechanic’s inspection, there are still other factors to consider when deciding if getting a salvaged vehicle is the right choice. This includes considering the very real possibility that it might be quite tricky, if not virtually impossible, to sell the car in the future. Getting insurance for a salvaged vehicle can also be tough.

Resale And Future Value

If you are planning to keep the car for life and never get rid of it, it might very well make sense to get a vehicle with a rebuilt title. However, if you think there’s a chance you want to sell the car down the road, you might think twice about getting one that’s been revitalized. Many people shy away from getting a car with a salvage title, just as you might be doing yourself! Even if you’re willing to take a chance on a car with a salvage title, there’s no guarantee that someone else will do the same. Another consideration is that after buying the car, you’ll be adding miles to the odometer. This naturally reduces the value of any car, but it may be another reason why a future potential owner hesitates to purchase the car from you.

Getting Insurance Coverage

Even if the car gets a green light based on your own inspection and your mechanic’s evaluation, you might encounter difficulties with auto insurance. Many insurance companies offer limited coverage for cars with salvage titles, and some might refuse to provide coverage at all. The main reason that this happens is that it is very difficult for an insurance company to assess the real value of a vehicle that’s been declared totaled in an accident. It’s also easy for an insurer to miss problems that were caused by the event that caused the car to be totaled. This is especially true for vehicles with more severe damage where there might be widespread and microscopic damage. While insurance companies might hesitate to cover any car with a rebuilt title, they might be especially hesitant to include cars that have been totaled from water damage, as it can take years for water damage to appear. Some insurance companies will offer to provide coverage for a car with a rebuilt title, but they’ll do so on a limited basis. In all states except for New Hampshire, which doesn’t require liability insurance, failure to get adequate insurance coverage from your car will mean that you’re unable to drive it, even if it checks out fine mechanically and structurally.

Final Considerations

If you’ve decided to go ahead with buying a car with a rebuilt title, there are a few final tips to keep in mind before you sign the paperwork and obtain the title. First, the seller should always provide the car’s original documentation, as well as the documentation that proves all said work was performed on the car to make it street legal again. If somebody refuses to hand you the paperwork, you should walk away. An honest and reputable mechanic or auto shop won’t have a problem giving you the documentation, along with any receipts that prove the claimed repairs were made. You can also get a copy of the car’s history, as reported, from the DMV. If you’re buying a vehicle that was titled and totaled in another state, the information will be available through that state’s DMV. It’s also critical to know what caused the car to become totaled. Understanding the cause can help you decide whether or not to get the car. It also helps to know the extent of the damage, who repaired the car, and what parts they used. Some mechanics will replace damaged parts in a salvaged car with aftermarket parts, or parts from other cars that have been declared totaled. Knowing these details can help you avoid major headaches (and expenses) down the road, as you’ll want to make sure that you’re getting a car filled with usable parts, not junk parts before you claim the title and hand over a check or cash.

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2018-06-22T22:44:40+00:00Car Shopping|