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Rebuilt Title Insurance: Is It Worth It? - Insurify

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JJ Starr

By: JJ Starr

Edited by Jackie Cohen

Last Updated June 15, 2022

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

Buying a car with a rebuilt title is not right for everyone. It can be a good way to save money when car shopping for a used car, but only if you know what to look for and what to look out for. This article will offer you a set of guidelines and best practices to follow when buying a car with a rebuilt title. By the end, you should know if a rebuilt car is right for you, plus how to insure it.

If saving money is important to you, you need to shop for car insurance with Insurify. One form lets you compare auto insurance rates from six or more insurance providers in your area without sharing your information with each company. You can also save your profile to receive an alert any time a better price is available. It’s the easiest way to save money on car insurance.

Quick Facts

  • A rebuilt title is given to a vehicle that was previously totaled.
  • Each state has different rules and regulations regarding rebuilt titles.
  • Getting a loan and insurance for a car with a rebuilt title can be tricky. The easiest thing to do is to purchase a car outright and carry liability-only car insurance coverage.

What is a rebuilt title?

Should I buy a car with a rebuilt title?

A car with a rebuilt title can be a good deal if the car sustained minor damage, was repaired by a specialist, and can be bought without a loan.

A rebuilt title is a branded title issued to a car that was once totaled (received a salvage certificate or salvage title) and has been repaired. To get a rebuilt title issued, the car has to pass a state inspection. State inspections are rigorous and done through the department of motor vehicles. Each state has different rules for rebuilt vehicles, so familiarize yourself first.

Although rebuilt cars go through a rigorous process to be ready for the road, they’re still going to be much cheaper than the same car with a clean title. Sometimes, repairs for a salvage vehicle are done by skilled mechanics who specialize in rebuilds. But that’s not always the case. For this reason, you should proceed with caution when considering a car with a rebuilt title.

Keep in mind that a salvage title car is a car that has yet to be repaired. While the resale value will be well below market value—and even less than what a rebuilt car will cost—proceed with extreme caution. A salvage title vehicle may not be allowed on public roads depending on your state. You will have a difficult time getting proper insurance for the car before it’s repaired.

Risks of a Rebuilt Title

A rebuilt car is a cheap way to buy a used vehicle. But whether buying one is a good idea depends on a few factors. The first factor is your needs from your car. If you have the ability to purchase your car outright (i.e., without a loan), you can avoid a lot of the obstacles associated with owning a car with a rebuilt title. Plus, you’re likely to get a good deal on your car purchase.

The next important factor is the extent of the car’s previous damage and the work done to repair the car. The more significant the damage, the more significant the repair needs. Cars with significant damage are more likely to have issues after the repair. The area affected by damage is also important. Damage to the frame, for example, is more serious than body damage.

The final factor to consider is who did the repair work. If the repairs are done by a certified mechanic with a proven history of doing good work, you’ll be in much better shape than if you were buying from a mechanic who lacks a positive track record. But keep in mind that even when a rebuilt salvage car gets all the right repairs, it can still have unexpected issues.

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Questions to Ask When Considering a Car with a Rebuilt Title

Be prepared to ask a lot of questions. There are a ton of variables when buying a rebuilt car, and no two rebuilds are the same. You should ask the following questions no matter what:

  • How was the car damaged?
  • Where was the car damaged?
  • How much damage did the car sustain? (a percentage is fine)
  • What repairs were done?
  • Who did the repairs?
  • What parts of the car have been replaced, and where were the parts sourced?
  • Do you have the maintenance history of the vehicle (including before it was totaled)?
  • Do you have the state inspection documentation and proof of title status?

If you’re buying from a seller who was not the person or business that did the repairs, you also want to get information about who did the repairs and when. The seller should have a complete record of receipts for the repairs, and you should review those receipts and contact anyone who worked on the vehicle. You should also ask your trusted mechanic to review those receipts.

Last, you should inquire with your current insurance company about whether they can insure the prospective vehicle.

Rebuilt Vehicle Red Flags

There are some red flags you should look out for when buying a rebuilt title car. The first is that the seller seems cagey or defensive when you ask the above questions. Any seller will want to sell quickly, but sellers of rebuilt vehicles should understand the level of due diligence a potential buyer should take. If you feel unduly pressured to buy, just walk away.

You should look for gaps or misalignments in the body panels and ensure the paint matches. Open and close the trunk and every door and window. Everything should work smoothly. Look for large dents, take pictures if possible. Look under the car to see if the fuel lines look good. Examine the tire tread to ensure it’s evenly worn. And make sure the airbag light works.

Signs of fire or flood damage are also a red flag. Vehicles that sustain these types of damage should never be repaired. A sure sign of flood damage is leaves, silt, mud, or sand in the trunk or glove compartment. The car could also have a musty or moldy smell.

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How to Buy a Car with a Rebuilt Title

Buying a car with a rebuilt title is quite similar to the process of buying a used car. But there are safety concerns you should keep in mind throughout the process. During your search, you should enter the keyword “rebuilt” into your search to help you find hits faster. You can also look for cars that are being offered at a lower price than what the Kelley Blue Book value would be.

Once you find the vehicle you want, you should inquire about the damage sustained and the repairs done. If possible, get a vehicle history report and a repair history. This is easy to do with a CARFAX report. If it looks good, you can schedule a time to take the car for a test drive. Be sure to take note of any strange noises or any other issues the car presents.

Before finalizing the sale, be sure to have the car thoroughly inspected by a trusted third-party mechanic. When possible, choose someone who has experience with rebuilt cars. If your mechanic gives you the thumbs-up—and no other red flags are present—you can go forward with the sale knowing that you’ve at least done all your due diligence.

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How to Buy Insurance for a Car with a Rebuilt Title

Buying insurance for your car will be a little different when you have a rebuilt title. You should know that many insurance companies will not issue collision or comprehensive coverage to cars with a rebuilt title. And the few that do will only do so under optimal conditions. Even so, you should be able to get state minimum car insurance.

Again, your options will be more limited. You should also expect to pay more to insure a car with a rebuilt title. Some insurers charge as much as 20 percent extra for cars with such a title. Be sure to take that into consideration when calculating your costs before you buy your car.

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Always Compare Rates Before Buying Car Insurance

Considering the elevated cost of auto insurance for a car with a rebuilt title, it’s a good idea to compare your costs before you buy your policy. Rates vary considerably between insurance companies. Plus, you may be able to access valuable discounts with some companies, while others offer no additional discounts that you can benefit from.

An easy way to compare rates is by using the rate-comparison tool from Insurify. Simply enter your ZIP code and fill out our short form with information about your vehicle(s) and driver(s). Hit compare and receive real quotes from top insurers in your area. You can adjust rate options to compare the costs between coverage limits. Only purchase when the price is right.

Frequently Asked Questions

  • A rebuilt title is given to a car that was badly damaged and then repaired. The car is often repaired by a mechanic who specializes in rebuilds, but that’s not always the case. To receive a rebuilt title, the car had to pass a rigorous state inspection. Even so, cars with rebuilt titles should cost much less (20 to 40 percent less) than the same car with a clean title.

  • A salvage title is for a car deemed a “total loss” and issued a “salvage certificate” by an insurer. A rebuilt title is for a car that was once salvaged and has since been repaired or refurbished. To earn a rebuilt title, the car must pass a strict inspection process that ensures the car is ready to go back on the road safely. The car should still be worth less than one with a clean title.

  • A rebuilt title is not necessarily a bad thing. It does come with some drawbacks, like expensive collision and comprehensive coverage. But car buyers looking for a cheap car that they will only purchase liability coverage for can find a good deal buying a car with a rebuilt title. Be sure to have the car thoroughly inspected by a competent mechanic before you seal the deal.

  • Good news: you can still get full coverage on a car with a rebuilt title. But you should ask yourself if the car is worth a full-coverage policy. On the one hand, finding an insurer willing to write a full-coverage policy for the car will be difficult. On the other hand, the car itself is not worth as much and may not be worth the extra expense and hassle of getting full coverage.

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JJ Starr
JJ Starr

Insurance Writer

J.J. Starr is a health and finance writer with a background in banking, lending, and financial advising. She holds a Series 6, FINRA, and life insurance licensure and a master's degree from New York University. Through her writing, she strives to use her decade of experience to help consumers make sound financial choices. Connect with J.J. on LinkedIn.

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