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Cars are expensive, and one way to keep costs low is to buy a used car with a rebuilt title. But while you might be saving a lot of money, you might also be taking on a lot more risk. So, is a car rebuilt title a good idea to save money, or should you avoid vehicles without a clean title?

What Is A Car Rebuilt Title?

When an insurance company considers a vehicle a total loss after a collision, fire, flood, or vandalism, its clean title is replaced with a ‘salvage’ title. This change in title informs potential buyers that the vehicle is considered totalled and is likely unsafe for driving.

If the vehicle is repaired and certified for operation on the road, its title can be changed to ‘rebuilt’. This title informs buyers that the car was once a total loss, but was fixed up and made operational for driving again. 

Rebuilt Title vs Salvage Title vs Clean Title

The main difference between ‘rebuilt’ and ‘salvage’ titles is the condition and safety of the vehicle. 

  • ‘Salvage’ titles apply to vehicles that are no longer safe to drive on the roads after being severely damaged. 
  • ‘Rebuilt’ titles, on the other hand, mean the vehicle was once deemed a total loss by an insurer. But has been repaired and inspected and is now roadworthy. 
  • ‘Clean’ titles apply to vehicles that have never been deemed as a total loss. The term clean title is also often confused with a clear title. Clear titles are used to describe a vehicle that has no liens against it. Meaning the owner has full ownership of the car.

How Can You Tell If A Vehicle Is Rebuilt Properly?

Buyers may be concerned about the safety and condition of a vehicle that was once considered a write-off after being damaged following an accident, vandalism, or some kind of natural disaster. Even though the vehicle may have been repaired by a professional, it can be difficult for prospective buyers to know for sure that the car is now safe to drive. 

You can generally find out if the car has been rebuilt by checking its vehicle history. You can do so by getting a Carfax Report.

What Should You Do If You’re Buying A Rebuilt Car?

Buyers would be well-advised to have a vehicle with a rebuilt title inspected by a trustworthy and experienced mechanic. These experts will be able to accurately assess any previous damage done to the vehicle and determine how well the car was fixed. Ideally, the vehicle should pass an evaluation that determines that all repairs were properly done.

That said, it’s still hard to know for sure if the car is roadworthy. A car with a rebuilt title may be a good deal, but it can still come with some uncertainties and risks. If you don’t have an appetite for risk, you may want to avoid vehicles with a rebuilt title. 

What Are The Pros And Cons Of Buying A Car With A Rebuilt Title?

There are a few reasons why a car rebuilt title might be an attractive option, particularly when it comes to price. But there are also some drawbacks to consider before purchasing this type of vehicle.

Pros 

  • Good price. The biggest benefit to buying a car with a rebuilt title is the cheap price tag. Since there is an inherent risk to buying a car that has once been totalled, sellers will offset this risk with a lower price. As such, you can usually get a very good deal on a car with a rebuilt title.

Cons 

  • Lower value. While you may be paying a lot less for a car with a rebuilt title, the car won’t have as much value as a vehicle with a clean title.  
  • Difficulty insuring. Some insurance providers may be hesitant to insure a vehicle with a rebuilt title, given its history of damage. Even if the car has been repaired properly, insurers may still view these vehicles as high-risk. Make sure you can get an insurance policy on a car before buying it.    
  • Difficulty getting a loan. Lenders may also be reluctant to extend a car loan to finance its purchase. Lenders typically require proof of insurability before they provide car loans. If you have a hard time getting a car insurance policy, you’ll have an equally difficult time getting approved for an auto loan.     
  • Potentially voided warranty. The manufacturer’s original warranty is typically voided after a vehicle has been totalled. That means if your car needs to be repaired, you’ll need to cover the cost yourself. 

Tips On Buying A Car With A Rebuilt Title

If you’ve decided to buy a car with a rebuilt title after carefully weighing the pros and cons, consider the following tips to keep yourself protected from purchasing a lemon

Find Out Who Made The Repairs And What They Were

The car should have been fixed by an experienced and trustworthy mechanic, not an unknown and unlicensed mechanic that is prone to cutting corners. Be sure to also get a list of the repairs. Ask for receipts that detail all the work done to the vehicle. This can help you determine the nature of the repairs and if good-quality parts were used.

In addition, inquire about whether or not there was any damage done to the frame, engine, or transmission. Not only do these repairs tend to be very pricey, but they may also impact the safety and integrity of the vehicle if they weren’t repaired properly.

Ask For Proof Of Insurance

As mentioned, you want to make sure the car you buy is insured, and one way to verify that is to ask the seller if the vehicle is insured as a branded title. If the current owner is unable to insure the vehicle, you may want to look elsewhere.

Test And Have The Car Inspected

Even after you’ve taken the above steps, you’ll still want to have the vehicle evaluated by a mechanic that you know and trust to find out exactly how well it was repaired. 

Similarly, never buy a car without taking it out for a test spin first. You want to make sure it runs smoothly and handles the road well. 

Final Thoughts

A car rebuilt title might be a great way to keep costs low when you’re shopping for a vehicle. But these cars come with a questionable history, which means you may be taking a gamble that may not be worth the initial savings. Instead, it may be more worthwhile to look at gently used vehicles with a clean title. 

Car Rebuilt Title FAQs

Does a rebuilt title affect the value of a car?

Yes, a car that’s been rebuilt after being deemed totalled by an insurance company is typically valued much less than a vehicle with a clean title.

Do you need car insurance?

Yes, you must have an auto insurance policy before you can take your car on the road. Not only is this a legal requirement, but your lender will also require proof of insurance before approving your car loan application. However, a car with a rebuilt title is more difficult to insure, as it may be considered riskier to insurers. Find out if a car you’re considering buying can be covered before purchasing it.

Is a rebuilt title bad?

A car rebuilt title is risky, as the vehicle could potentially be structurally unstable and a danger on the road if repairs were not made properly or missed altogether. You’re also taking a bit of a gamble when it comes to getting car insurance or financing. You’ll need to consider whether or not the lower price you pay for a car with a rebuilt title is worth the added risk.
Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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