13+ years writing insurance and personal finance content
Insurance, lending, and retirement expert
Jacqueline has contributed content, and her personal finance passion, to dozens of noteworthy financial brands, including Credit Karma, Bankrate, and MagnifyMoney.
Over 3 years of experience producing content on insurance and personal finance.
Key architect of Insurify's quality score.
Courtney's deep knowledge of personal finance goes beyond insurance and includes credit cards, consumer loans, and banking. She loves creating practical content.
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A car may receive a rebuilt title if an insurance company declared it a total loss but someone restored it to an operable driving condition. Cars with rebuilt titles may be cheaper, but they could have potential hidden issues and an even lower value if you resell them.
Getting insurance for rebuilt title cars can also be tricky, as it requires careful evaluation and special coverage due to their unique history.
Here’s what you need to know about cars with rebuilt titles and why it’s important to compare car insurance quotes before purchasing one.
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What is a rebuilt title?
A car title (also known as a vehicle title) is a document that includes important details about a vehicle, like who owns the car and if it’s sustained damages.
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, and the car may receive a rebuilt title if someone restored it to working order.[1] Some states, like Massachusetts, may use different terms for rebuilt cars, such as “reconstructed.”[2]
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. 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 new title may also include the reason the car was rebuilt.[2]
It’s easy to confuse a salvage title and a rebuilt title. A salvage indicates the car is unsafe to drive following an incident, but the car may receive a rebuilt title if you repair it to working condition and a state-approved authority inspects it.[1]
The title a car receives depends on the extent of damage and its repairs. When a car is damaged, an insurance company can label the car as a total loss. State law can influence what happens next. The car may be salvaged when its repair costs exceed its market value. The state’s motor vehicle agency usually provides the salvage certificate after you complete an application.[3]
Here are some of the key differences between a salvage title and a rebuilt title.
Rebuilt-title cars may be worth 20%–40% less than a similar car with a clean title, according to Kelley Blue Book.[4]
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 vehicle’s make, model, 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.
Rebuilt title car pros and cons
Buying a car with a rebuilt title or applying for a rebuilt title has benefits and drawbacks to consider before moving forward.
Pros
More affordable to purchase
Safe to drive with proper repairs
Thorough history of repairs
Cons
May be harder to insure
May have underlying damage
Lower resale values
How does a vehicle get a rebuilt title?
The process for getting a rebuilt title varies by state, and many states require applications, registrar fees, thorough documentation, and an inspection. Here’s a general overview of how a vehicle could receive a rebuilt title:
An event severely damages the vehicle, and the driver’s insurance company declares it a total loss.
The state issues the vehicle a salvage title. You can transport the car to a body shop or wherever you plan to make repairs.
Once you complete the necessary repairs and submit an application to your state, the vehicle must pass a state-sponsored inspection. If the inspector deems the vehicle to be properly restored and meeting safety standards, the state issues a rebuilt title.
This title signifies that the vehicle is now fit for public roads despite its prior salvage status, but it also serves as a permanent record of its history, impacting its resale value and potential challenges in obtaining insurance.
Questions to ask before buying a rebuilt-title car
If you’re weighing the decision of whether to buy a used vehicle with a rebuilt title, consider asking the following questions:
How was the car 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 flooded car could have electrical damage. You’ll want to know if the entire electrical system was replaced and whether the parts were used or new, Worters says.
Can you review the car’s documents? It’s a good idea to 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.
Are you a mechanic who specializes in rebuilt cars? Even if the car passes 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.
How much will auto insurance cost? Understand whether you can get rebuilt title car insurance and whether the premium fits into your budget.
What’s the car’s resale value? If you think you’ll sell the car in the future, you’ll need to consider its lower resale value. You’ll also likely have fewer offers because some people aren’t comfortable driving a car with a rebuilt title.
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Should you buy a car with a rebuilt title?
You may benefit from buying a car with a rebuilt title if you’re someone who:
Values saving money over a pristine vehicle history
Has mechanical knowledge or access to trustworthy mechanics who can accurately assess potential issues
Collects cars and is looking for a specific make and model unavailable by other means
But anyone who wants a hassle-free purchase, is concerned about potential hidden damages, or looking for a vehicle with strong resale value might not find a rebuilt-title car suitable. You should also conduct thorough research and consult with a trusted mechanic before deciding whether a car with a rebuilt title is right for you.
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, insurance costs for 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 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 quotes.
Check out Insurify’s guide on buying a used car, and read the answers to common questions about rebuilt title cars below.
What are the disadvantages of buying a car with a rebuilt title?
If a car has a rebuilt title, 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, 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?
It depends. How safe a rebuilt car is varies on the extent of damage and the quality of repairs. Some rebuilt titles indicate moderate damage, potentially restored to like-new condition. Before buying, obtain the VIN, run a vehicle history report, and ask the owner about the damage, repairs, and who performed the repairs.
Can rebuilt titles be trusted?
It depends. It can be hard to say if you can trust a car with a rebuilt title if you don’t do your own research into the history of the car and its repairs. It can help to hire your own trusted mechanic to review the car before purchasing it.
Is a rebuilt title the same as salvage?
No. Salvage titles are for vehicles that are inoperable and declared a total loss, while rebuilt titles are for cars that were once salvaged but have been repaired to road-worthy condition and passed state inspection.
Are rebuilt-status cars really that bad?
Rebuilt status cars aren’t inherently bad, but you should buy with caution. They’ve undergone significant repairs post-salvage. You need to assess each rebuilt-status car individually and should consider the extent of damage, quality of repairs, and thorough inspections before deciding on their reliability.
During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Jacqueline is a contributor for Insurify and has worked with more than a dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.
Jacqueline has been a contributor at Insurify since October 2022.
Over 3 years of experience producing content on insurance and personal finance.
Key architect of Insurify's quality score.
Courtney's deep knowledge of personal finance goes beyond insurance and includes credit cards, consumer loans, and banking. She loves creating practical content.
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