These days, there is a huge demand for used cars. But, even while there are some fantastic deals to take advantage of, there are also many warning stories about the risks of purchasing a faulty car from a suspicious seller. Many of these cautionary tales include rebuilt title cars. Is this type of secondhand car a wise choice? Or should you steer clear of them? Although it's perfectly acceptable to be wary of vehicles with rebuilt titles, this does not necessarily imply that they are of poor quality. Below, we’re sharing the most important things to know about rebuilt title cars so you can make an informed choice.
What Does Rebuilt Title Mean?
A brand-new vehicle has a "clean" title. That suggests that the car has never been deemed a total loss. On the other hand, a salvage title is issued to vehicles deemed a total loss. Then, if the car is fixed and put back together again, it can get a rebuilt title.
The insurance provider would usually declare a vehicle a total loss if repairs cost between 70% and 90% of the car's worth. When a vehicle is declared totaled, it will be given a salvage title, which means it is unsafe to drive. In addition to accidents, there are other situations where a vehicle might be given a rebuilt title. These include cars that have been repurchased as a result of lemon claims and vehicles destroyed by fire or other severe weather conditions. It might also include vehicles with rolled-back odometers. You are not permitted to drive, register, or sell the car after receiving a salvage title unless it’s fixed.
The insurer often sells salvage vehicles to a company that wants to fix them or disassemble them for parts. If the vehicle is restored to a roadworthy condition, it might be given a rebuilt title. Before getting a rebuilt title, the car might need to pass a few examinations, depending on the state where it is registered. After that, the state’s Department of Motor Vehicles office transfers the title of the vehicle from junk or salvage to rebuilt.
What to Know Before Buying a Car With a Rebuilt Title
Since the car has once been damaged and salvaged, you should know a few things before deciding to buy.
The initial investment is low — Cars with rebuilt titles are usually less expensive than other types of used vehicles because they have once been damaged and repaired. As a result, the initial expenditure is almost always significantly low.
Car title conditions vary from state to state — If you're looking to purchase a rebuilt title vehicle, you should research the legal requirements in your state. State-by-state title standards vary greatly. For instance, New York law mandates that the seller disclose any prior harm to the buyer. Arizona does not expressly mandate this, though. Moreover, most states demand that the cars are inspected before obtaining a rebuilt title. But since this isn’t required in every state, getting your car checked before buying would be a good idea.
Getting insurance for rebuilt cars might be difficult — Many insurance companies decline to cover vehicles with rebuilt titles because they consider them to pose a high road risk. Even when auto insurance companies offer coverage, they frequently provide a few options, such as liability insurance. The policy's cost would also be higher.
Financing might be tricky — Even though buying a repaired title car may require a low initial investment, you might still want to secure financing. However, obtaining financing for rebuilt cats is challenging. This is particularly true if you want to get a loan from a bank because they won't be eager to grant you a loan for a vehicle that was once deemed junk.
Cars with rebuilt titles can get expensive with time — It’s crucial to consider the ongoing expenses associated with a rebuilt title vehicle. Sometimes, after being fixed with all new components, the car may perform like new. However, in other situations, it can be hardly drivable. So, it’s of the utmost importance to inspect the vehicle and its components before you purchase. Otherwise, it can end up costing you money over time.
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How to Determine if a Rebuilt Title Car is Right For You
Buying a once-damaged car is a risky choice that could pay off provided you know what you're doing. One of the biggest benefits is that such a car would often cost substantially less than cars with clean titles. For example, the average cost of a damaged or rebuilt vehicle is 20% to 40% cheaper than the exact car with a clear title.
That being said, if the repairs that were previously completed were subpar, buying a rebuilt title car may result in longer-term expenses. You acknowledge that the vehicle sustained extensive damage when buying a rebuilt car but there could occasionally be unreported or hidden damages that come to light later.
So, before buying a rebuilt title car, take a moment and conder the following:
The car’s repair receipt — If the vehicle owner is the one who had it repaired, ask for a detailed account of the repairs to find out how carefully the repairs were carried out and whether high-quality components were utilized.
Learn who fixed the car — Confirm that the repairs were performed at a prominent shop. If a shady mechanic did it, you're taking a gamble.
Check if the car’s powertrain or frame is damaged — Car sellers tend to skimp on costly repairs such as the car's engine and frame. Therefore, be extra cautious moving forward if these parts were harmed in the collision.
Test drive the car to ensure it works well — When purchasing vehicles with rebuilt titles, it’s impossible to verify if the car has been correctly rebuilt without conducting your due diligence. Test drive the car yourself or get a competent mechanic to do it to protect yourself from unscrupulous vendors. By overlooking this step, you run the danger of eventually having to pay more for repairs because such cars virtually never come with a money-back guarantee.
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The Bottom Line
A rebuilt title car could be a wise choice if you’re looking for an affordable solution. While it’s true that such a car comes with higher risk, it could turn out to be a great buy. In order to protect yourself from getting scammed, make sure to buy from a reputable dealership, get extensive information about the car’s history and all repairs that must be completed, and get a professional mechanic who does great work inexpensively.