What Is a Rebuilt Title?

You’re scanning Facebook Marketplace for an affordable used hatchback, and you come across a sleek-looking Subie (that’s short for Subaru for all you built-Ford-tough folks) years newer than what you thought you could afford—yet this one is in your budget! Your fingertips tingle and your heart speeds up as you look it over: leather seats, low mileage . . . is this the deal of a lifetime?

Then you see it: rebuilt title.

What is a rebuilt title? Is it bad? Why is the car so cheap? If you’ve ever wondered these things, keep reading—we’re going to get into it right now.

What Does Rebuilt Title Mean?

When a car has been totaled by an insurance company and then repaired to good working order, it’ll have a rebuilt title. “Good working order” is up for debate, though.

You could get a really great deal on a reliable car that’ll get you from here to there for years.

Or you could think you’re getting a really great deal that turns out to be a lot of money for a piece of crap . . . er, scrap.

While buying a used car instead of a new car is a good idea, it’s already a risky business with plenty of bad players. Purchasing a car with a rebuilt title just opens you up to even more risk.

Rebuilt Title vs. Salvage Title

If you think rebuilt and salvage titles are the same, you’re wrong—but you’re not far off.

When the insurer totals the car, it gets a new title: a salvage title. At that point, the car may be scrapped for parts or repaired if someone thinks they can make a buck. Once the car is repaired, it gets a rebuilt title.

Think of it this way: A phone that has a smashed screen and doesn’t work equals a salvage title car. That same phone with a new screen listed as refurbished on eBay equals a car with a rebuilt title. Do you trust that refurbished phone? Does the battery work well? Will it have bugs? Will the new screen work or will the f always type a g? Yeah, you get it. It’s the same deal—except a car with a rebuilt title costs about 20 times more than a refurbished phone!

Rebuilt Titles From State to State

States love being unique, and when it comes to car titles, it’s no different. Rules around rebuilt titles and branding (stamping a title with rebuilt, salvage or some other indicator) vary depending on what state you’re in. Some states even have very specific titles that include whether the car was declared a lemon or totaled because of meth contamination. (Yes, that’s a thing!)

The bad news is, these variations make it easier for shady sellers to make unpleasant events in vehicles’ histories disappear. Because some states require more specific branding and deeper background checks than others, dealers can move a vehicle from one state to another and sometimes sidestep their way around explaining the car’s past. This is called title washing and it’s illegal, but it still happens.

States also differ on what qualifies a car to be totaled, so in some states a rebuilt title could indicate more damage in the car’s past than in others. But the variations don’t end there. The criteria a repaired salvage car must meet to earn a rebuilt title are also different from state to state.

Does a Rebuilt Title Affect the Car’s Value?

This is what makes a rebuilt title car so attractive: The rebuilt brand on the title knocks serious value off the car—from 20–50%—and often makes them look like a steal.¹

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When a car has been rebuilt, it’s likely had severe damage—like a bad collision. Even if the car was repaired by an expert (and you have no way of knowing it was), it might still have problems that were overlooked or haven’t appeared—yet. These unknowns damage the car’s value and force the price down.

Why You Should Buy a Car With a Rebuilt Title

There’s no hard-and-fast rule that says you absolutely should not buy a car with a rebuilt title. If you do your research on the car and decide it’s right for you, it just might be. 

Low Price Tag

That attractive low price is the biggest reason to buy a car with a rebuilt title. They’re just plain cheaper. You can get a newer car with nicer extras while parting with less of your precious green stuff. Ah, the luxury of a heated steering wheel in the depths of January . . .

Availability

Another reason you might find yourself seriously considering a car with a rebuilt title is availability. People shopping for a used car in Custer County, Idaho, don’t have a lot of selection. A car with a rebuilt title might be the best option available.

Why You Shouldn’t Buy a Car With a Rebuilt Title

While the upsides to buying a vehicle with a rebuilt title are appealing, there’s a dark side to these sweet-looking deals you should know.

Major Problems

The biggest issue with buying one of these questionable vehicles is the higher likelihood of serious problems with the vehicle’s safety or reliability. A rebuilt title is a clear warning that something went very wrong with the car—so wrong the insurance company called it a total loss. That doesn’t necessarily mean it can’t be fixed, but it does mean it wasn’t worth fixing (to them anyway).

For the vehicle to end up fixed and posted on Facebook Marketplace, someone had to think the car was worth fixing. That person could either be a mechanic who’s looking to make a little money with their car repair skills or someone shady who doesn’t mind cutting corners. You have no real way of knowing for sure which it is.

On top of that, even if your seller did their best to make sure it was fixed right, the car still likely went through some major trauma. And when it comes to safety, there’s no way to know how it might affect performance.

Shady Dealers

Speaking of which, snake oil salesmen are often the kind of people unloading vehicles with these kinds of branded titles. Whether they’re up-front with you about the title or not, they may not be honest about other issues or even about the damage that caused the car to be totaled. You open yourself up to a lot more risk by buying a rebuilt title car.

Hard to Get Insurance

Let’s say you bought the perfect rebuilt title vehicle—one that only suffered cosmetic damage and was repaired well. You’d still have to deal with the fact that insurance companies refuse to fully cover vehicles with rebuilt titles. Because of their questionable state, most carriers won’t give you collision or comprehensive coverage.

The insurance they will give you will be at a premium—a premium premium. And usually, it’s just liability coverage. If you already own a car with a rebuilt title and your premiums are sky high, you can try talking with an independent insurance agent who’ll shop all available quotes and find you the best possible rate.

Hard to Sell

Finally, if all that wasn’t enough to scare you off, there’s one more thing to think about. If you do buy a car with a rebuilt title and then decide it’s time to upgrade, it’ll be very hard to resell it to someone else. Just like you did, any new buyer will have a million questions about the safety of your vehicle, and many will move on as soon as they see rebuilt title.

What You Should Look for When Purchasing a Car With a Rebuilt Title

Whether you’re intentionally buying a car with a rebuilt title or someone is trying to sell you one pretending the title is clean, you can look for signs to figure out what the car’s been through.

Reasons Why a Car Might Be Totaled and Have a Rebuilt Title

At what point does a car get totaled? When the cost to fix the car gets close to or is more than the cash value of the vehicle, the car is considered a total loss by insurance companies. Or sometimes insurers will total a car if they think it’ll be unsafe to drive even after it’s repaired.

A vehicle can be totaled for lots of reasons—and not all of them mean the vehicle still isn’t a good purchase after it’s fixed.

Flooding

Storm surge from hurricanes and river overflow from heavy rains swamp thousands of cars every year. And then they end up on used car lots all over America.

Cosmetic

Sometimes damage is purely cosmetic (like hail damage) which makes the car look rough on the outside, but everything else still works. This is the best-case scenario when it comes to buying a rebuilt title car.

Expensive Part Needs Replaced

Another reason a car might be totaled is because it needs a very expensive part replaced—a part that’s worth near or more than the actual cash value of the vehicle. For example, sometimes insurance companies will total a car after the airbags deploy because they’re so expensive to replace.

Someone who has access to parts on the cheap or knows how to do the repair themselves might see this as an opportunity. They replace the part and offer the vehicle up for sale with a rebuilt title. Depending on what the part is, this could be another situation where the car is decent even though it has a rebuilt title.

Catastrophic Damage

Major damage could happen many ways. Maybe the vehicle was in a major accident and the frame is bent or chipmunks ate up all the wiring while it sat in the driveway. This is usually what puts the fear of God in people about rebuilt titles. You just don’t know for sure what happened and how bad the damage really was (or is).

In general, front-end damage is a bigger problem than back-end or even rollover damage because the front is where most of the important stuff lives. It’s more likely the electrical systems or engine was damaged if the front is smashed, which will lead to more issues in the long run.

How to Tell What Happened

Let’s say that sleek Subie with the rebuilt title looks too good to not at least check it out. When you go, there are some signs you can look for to tell what kind of damage happened to the car.

Signs That Tell You What Happened

Sign	Damage	Looks Like	Where to Check
Water	Flooding	Condensation in headlights, waterlogged floor mats or carpeting	Headlights, floor, seats, front console
Mold	Flooding	Water stains, dark stains, bad odor	Behind front console
Sand or silt	Flooding	Grime settled into small spaces and crevices	Spare tire compartment, alternator crevice, power steering pump, starter motor
Rust	Flooding	Rust on any metal is a bad sign, but especially inside	Screws or bolts inside vehicle, around doors, pedals, trunk latches
Airbags that don’t work	Collision or flooding	Airbag indicator light flashing or solid	Instrument panel, dashboard
Large dents	Collision	A large caved-in area on the body of the car	Exterior
Doors that don’t shut properly	Collision, bent frame	Doors that stick out even when shut, space in door jamb when shut	Doors
Parts that don’t line up or match	Collision, bent frame	Seams of car body aren’t flat, parts stick out farther than others, sections of body are a different color or material	All over, especially exterior

If you see any of these signs, it’s a good indicator the vehicle has been through the wars.

And just because you don’t see any of these signs doesn’t mean the car didn’t experience damage. Dealers and others selling cars with rebuilt titles are sometimes very good at cleaning them up—another reason to be wary of a rebuilt title.

How to Make Sure You’re Not Getting a Raw Deal

When it comes to used cars—especially those with rebuilt titles—there’s no way to know for sure what you’re getting. But if you’ve decided you’re going to take the plunge and buy a car with a rebuilt title, here are some steps you can take to give yourself a little more peace of mind about the purchase.

• Buy from a reputable dealer.
• Check the title yourself (titles should be branded if the car’s been totaled before).
• Look up the title to find the history.

You can search several websites for more information.

Use the VIN number to look up the car on:

• Carfax
• Kelley Blue Book
• VINCheck from the National Insurance Crime Bureau
• National Motor Vehicle Title Information System
• AutoCheck

How Does a Rebuilt Title Affect Your Insurance?

Many insurance companies won’t offer full coverage for a car with a rebuilt title, only liability—and potentially uninsured motorist coverage and personal injury protection (PIP). Carriers won’t give you collision or comprehensive because a rebuilt title makes it difficult to figure out the condition and value of the car.

Like we mentioned before, whatever coverage you can get will also be very expensive.

If after reading all this you’re still keen on a car with a rebuilt title (or you already have one), the best way to find insurance is to talk to an independent insurance agent. They’ll compare quotes for you and find the best option for a rebuilt title and your specific needs.

Connect with a RamseyTrusted insurance pro today!

Frequently Asked Questions