Co-authored the book “Future Millionaires’ Guidebook”
13 years writing personal finance content
A former chief copy editor at Bankrate and past managing editor at Macmillan, Kim specializes in writing easy-to-understand, actionable personal finance content.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
Why you can trust Insurify: Insurify’s expert insurance writers and editors operate independently of our insurance partners. As an independent agent and insurance comparison website, we make money through commissions from insurers. But that does not influence any editorial content, including reviews. Learn more.
A car may receive a rebuilt title if it’s damaged in a serious accident and then restored to an operable driving condition. If you’re planning to apply for a rebuilt title or thinking about buying a car with a rebuilt title, here’s what you should know.
A car title is a document that includes important details about a vehicle, like who owns the car and whether it’s been damaged in any way. A car starts out with a clean title, which means it’s never been in an accident. It may receive a salvage title after it’s seriously damaged,[1] and the car may receive a rebuilt title if the car is restored to working condition.[2] Some states, like Massachusetts, may use different terms for rebuilt cars, such as “reconstructed.”[3]
If your car was in an accident, your insurer will assess the car and determine if it’s a total loss based on repair costs.[4] You or the insurance company need to apply for a salvage title, and if it’s later repaired, you could apply for a rebuilt title. The title may include the reason the car was rebuilt.[3]
How is a salvage title different from a rebuilt title?
A salvage title indicates the car is unsafe to drive following a major incident,[1] but the car may receive a rebuilt title if it’s repaired to working condition and inspected. The title a car receives depends on the extent of damage and what’s been done to fix it.
When a car is damaged — whether it’s due to an accident, flooding, mechanical failure, or something else — an insurance company can label the car as a total loss. What happens next depends mostly on state law. The car may be considered salvage when its repair costs exceed its market value,[4] and the state’s motor vehicle agency usually provides the salvage certificate after completing an application.[5] A salvage title warns potential buyers that the vehicle has been severely damaged and is no longer safe to drive.[4]
Depending on the extent of the damage, the car may either be repaired or sold for parts.[6] A repaired vehicle may need to go through a state-mandated inspection, where a professional checks things like the vehicle identification number, the appraisal report, and the bill of sale to see if any major components were replaced. Depending on the state, the inspection may or may not focus on safety.[7] After the inspection, you can apply for a rebuilt title, register it with your state motor vehicle agency, and either sell or drive the car.[4]
How does a rebuilt title affect the value of a car?
Rebuilt title cars may be worth 20% to 40% less than a similar car with a clean title, according to Kelley Blue Book, a company that specializes in vehicle valuation.
That’s because “the car has had significant damage,” says Loretta Worters, vice president of media relations for the Insurance Information Institute. “There also may be undisclosed or unseen damage in a rebuilt vehicle, such as one that has been flooded.”
Other factors — such as the model year and popularity — influence the car’s value. “If there aren’t that many of that make and model on the road and it is a desirable brand, the value could be higher,” Worters says.
Things to consider before buying a car with a rebuilt title
If you’re weighing the decision of whether to buy a car with a rebuilt title, consider the following:
Ask how the car was damaged. Ask the seller why the car has a rebuilt title, the extent of the damage, and how the car was repaired. For example, a car that was flooded could have extensive electrical damage. You’ll want to know if the entire electrical system was replaced and whether the parts were used or new, Worters says.
Check the documents. Look over the documents from the mechanic, a copy of the inspection report, and proof of title status to make sure the owner followed the appropriate steps to get a rebuilt title.
Ask a mechanic who specializes in rebuilt cars. Even if the car passed a state-mandated inspection, you can get a second opinion on whether the car is safe to drive. “It may look good, but there could be rusting or rotting on the body of the car that isn’t seen,” Worters says.
Get an insurance quote. You’ll want to know whether you can get rebuilt title car insurance and whether the premium fits into your budget.
Understand the resale value. If you think you’ll sell the car in the future, you’ll need to consider the lower resale value. You’ll also likely have fewer offers because some people aren’t comfortable driving a car with a rebuilt title.
Car insurance for cars with a rebuilt title
Insurance companies may issue a liability policy for a rebuilt title car but might not offer collision and comprehensive coverage. That’s because it can be difficult to establish the value of a rebuilt car. Additionally, the premium on a rebuilt title car may be 20% more expensive because of safety concerns.
“Insurers may find that, in the restoration process, issues weren’t addressed or certain procedures weren’t done, which can lead to dangerous situations on the road,” Worters says.
For example, if the car was misaligned, it can damage the suspension components — potentially resulting in expensive car repairs. Plus, driving the car at high speeds with a wheel misalignment can make it difficult to steer and increase the risk of an accident.
“If you can provide documentation from a reputable mechanic stating that the vehicle is in good working condition, that can help with rates or even getting full insurance coverage,” Worters says.
If you’re planning to get a rebuilt title for your car or you’re thinking about buying one, it’s important to get a quote for the insurance policy beforehand. Using a comparison platform can help you save time and compare offers.
Here are answers to some commonly asked questions about rebuilt car titles.
What are the disadvantages of buying a car with a rebuilt title?
If a car has a rebuilt title, that means it was once damaged to the point it was inoperable. Even if the car passes an inspection, problems could potentially reemerge later. Cars with rebuilt titles are also more difficult and expensive to insure. And if you want to sell the car later on, it may go for less than a similar car with a clean title.
Why are rebuilt cars so cheap?
A rebuilt title car is typically priced lower than a similar car with a clean title because it has major damage in its history report.
Are rebuilt cars safe?
Whether a rebuilt car is safe depends on the extent of damage and how it was repaired. Some cars with rebuilt titles only sustained moderate damage and may be restored to like-new condition. If you’re thinking about buying a rebuilt car, you can ask for its VIN and run a vehicle history report. Also ask the seller to explain how the car was damaged, how it was repaired, and whether a certified and licensed mechanic completed the repairs. Ask for documentation — like the inspection report, receipts, invoices, or service records — to back up everything the seller explains.
Some states don’t require safety inspections for rebuilt cars, so you’ll want to check this out yourself. Ask the seller if you can get the vehicle checked by a trustworthy mechanic you know.
Massachusetts Registry of Motor Vehicles. "Salvage inspections." Accessed January 23, 2023
Kim Porter
Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
