When shopping around for a used automobile, you need to consider aspects like the original damages, the outcome of the initial inspection, and – no less importantly – the insurance coverage you can and can’t use with the car in question.
Read on to learn everything you need to know about rebuilt title cars, relevant insurance policies, and the viability of buying a car that has been severely damaged.
The Rebuilt Title Meaning Explained
A rebuilt title means that the car was in a severe accident and had to be repaired and restored to its driving state. Most rebuilt title automobiles previously had a salvage title indicating that their repair cost after the accident exceeded their market value.
Besides road accidents, a car can be estimated as a total loss after hurricanes, vandalism, hail, or tornados, among other qualifying events. More often than not, a damaged car is totaled out by the insurance provider and sent to be scrapped for spare parts. Alternatively, it can be sold to repair shops and reconstructed.
Once the repaired car is determined safe to drive, its status changes to the rebuilt title. That said, its salvage status is here to stay. The record will never be clean again, which you should consider if you want to buy such a vehicle.The good news is that buying a reconstructed title car can save you up to 40% of its value. However, it’s up to the driver to determine whether the game is worth the candle depending on how the car will be used, the driver’s risk tolerance, and other factors.
Rebuilt Title Rules in Different U.S. States
Depending on the U.S. state, the rules and regulations for a rebuilt title can significantly differ.
Here’s a list of documents required when applying for a rebuilt title in different states:
State | Regulations |
Florida |
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North Carolina |
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Ohio |
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Texas |
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Indiana |
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Illinois |
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Michigan |
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Colorado |
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Oregon |
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Arizona |
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Alabama |
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New York |
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Tennessee |
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Georgia |
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Pennsylvania |
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Oklahoma |
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Washington state |
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As you can see, the list of documents can vary significantly in each state. For example, they may require photographs of the car from all angles. As a future owner of a car with a rebuilt title, make sure to study the requirements of the state where you wish to receive the status.
Insurance Companies That Cover Rebuilt Title
It’s worth knowing that some insurance companies are willing to cover the expenses associated with a rebuilt title in the United States.
Here’s the list of documents that may be required to cover your rebuilt title expenses:
Company | Documents |
GEICO |
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State Farm |
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Allstate | Allstate insurance does not cover vehicles with rebuilt titles. |
Progressive |
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USAA |
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Farm Bureau |
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On top of that, insurance company reps can answer all kinds of questions about a rebuilt title, from the basic “How do rebuilt titles work?” to more complex ones like “how to value a car with a rebuilt title.” They can also give you an idea of the rebuilt title insurance cost and whether you need it at all.
Rebuilt Title VS. Salvage Title
Cars with rebuilt or salvage titles have suffered significant damage, and replacing them was more cost-effective than repairing them. The difference between these terms is that a car with a salvage title was not repaired, while a car with a rebuilt title underwent repairs.
In other words, a salvage car is not eligible for insurance and legal road use. However, if you repair such a car, you can obtain a rebuilt title, confirming its insurability. This status also complies with your state’s requirements for the car’s roadworthiness.
So, does a rebuilt title affect insurance?
Here you go:
Type of title | Full coverage | Liability only | Drive on roads |
Salvage title | No | No | No |
Rebuilt title | Sometimes | Usually | Yes |
Are These Cars Worth Buying?
There is a perception amongst auto enthusiasts that buying a reconstructed vehicle is an unequivocally poor investment. Yes, there are specific gains and losses when purchasing a rebuilt title car. And while there are numerous reasons to consider this purchase, it mostly depends on the individual situation.
Let’s face it: it can be a very lucrative deal. The buyer, however, should stay extra cautious and double-check everything. It might seem like a drawback regarding time and effort, but better safe than sorry.
Here are the most common concerns and issues you must address before selling or buying a vehicle with a rebuilt title:
Infographic “Crash Course: A Complete Guide To Buying Cars With Rebuilt Titles”
Questions Most Buyers Ask Before Making a Final Decision
What most drivers care about is long-term safety. However, buying a vehicle with a rebuilt title tends to raise doubts about the quality, external wear, and manufacturing defects.
Ask the following questions before acquiring rebuilt vehicles:
- Under what circumstances was the automobile ruined or damaged?
- How significant was the destruction?
- How and when was the car reconstructed?
- Is the frame correctly aligned?
- Who examined the automobile?
- When did the checkup take place?
- Can your insurance provider grant traditional coverage options for the restored vehicle?
- Can you get full coverage on a rebuilt title car?
Pros and Cons of Buying a Car With a Rebuilt Title
When making a decision to purchase, keep in mind that a rebuilt title has its pros and cons.
Pros
- Buyers can save up to 40% of the car’s original price
- You can find a restored automobile with minimal harm before the reconstruction
Cons
- A chance to overlook critical damage before the deal is officially closed
- The auto might require additional repairs
- Insuring a reconstructed auto can be challenging and tricky
Should You Buy or Steer Clear of Rebuilt Cars?
With all the pros and cons of buying a branded title car, it is wise to keep searching for the best offer in the market until you find what fits your budget and risk tolerance. In some cases, buying a car with a rebuilt engine might be a better choice.Likewise, buying a car with a branded title can be your golden ticket if you own a car repair shop and look for high-quality car parts. But bear in mind that the decision is always individual.
Getting Car Insurance for Salvage or Rebuilt Title Vehicles
Buying car title insurance is always about the nature of the damage. For example, if the car suffered more or less cosmetic damage, it’s likely safe to take it out for a drive again after the repair.
However, some damages, such as those caused by floods, can cause lasting consequences while being indistinguishable on the spot. For drivers, it means purchasing insurance for a reconstructed vehicle is complicated.
For an insurance provider, a rebuilt title represents increased risks and potential mechanical issues. And yet, most states require minimum coverage, so buyers need to find carriers willing to provide policies for reconstructed cars.
If you already have an active policy and want to buy a rebuilt auto, your coverage might not extend. Finding a provider eager to write a policy for the automobile with a rebuilt title will require additional tests and checkups.
Why It Is Important To Get a Second Opinion
Understanding how to value rebuilt title cars is crucial. It is not enough to examine a vehicle once. Everything, including the documentation, might seem legit at first, but the goal is to ensure an auto you plan to buy is worth the risk.
You need to find a trustworthy car shop and check the automobile once again. The exterior might not cause doubts, but a car might require additional repairs and maintenance.
Experience matters, and the best way to get the car checked is to find a mechanic with a solid background in handling cars with rebuilt status. Otherwise, you might miss some of the technical problems.
Make Sure That Your Auto Is Not a Lemon
Besides asking questions and getting a second opinion, buyers must look out for other critical signs. It is no secret that the repairs are not always made properly.
Here is what you can do to check the maintenance quality yourself:
- Double-check if the panels are perfectly aligned
- Carefully examine the paint colour
- Check for fuel lines beneath the auto
- Open and close all the doors and a trunk several times
- Check all the warning lights on the panel, including the airbag warning light
If you detect any of these issues, we recommend thinking twice about buying the car. The flaws might be too severe for the vehicle to serve its purpose.
Frequently Asked Questions
What does a rebuilt title mean?
A rebuilt title is given to a car that has undergone severe damage and was repaired to a roadworthy state. The rebuilt title car value is up to 40% lower than the original price of the car.
How does an auto get a rebuilt title?
It depends on the state’s procedures. The most appropriate way to determine how your car can get the title is to contact the state Bureau of Motor Vehicles.
How can I make sure that the car with a restored title is worth buying?
You first need to check the accident history that was initially granted a salvage status. Then, you must request the documentation and find out who did the repair and restoration work. Even if the mechanic has positive reviews, consider getting a second opinion, as it can help you understand precisely what you are dealing with.
Does the title affect your insurance options?
You cannot access the same number of policies if you own a restored title auto. It can be relatively easy to get liability coverage. As for traditional options, it depends on the provider. Owners typically have to look for the ones willing to cover vehicles with rebuilt titles.
Is selling a car with a rebuilt title worth it?
Selling rebuilt title cars can still be profitable, especially if your perceived risk of keeping such a vehicle is high. Likewise, selling a rebuilt title car can be an effective way to tap into potential car buyers who don’t have a budget for new cars.
What is a reconstructed title?
A reconstructed title, or a reconstructed vehicle, is the same as a rebuilt title car. Some states use the “reconstructed” word, whereas other states use the “rebuilt” alternative.
Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to American REIA. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At American REIA, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.