Rebuilt Title: Buy or Not, Definition, Rebuilt vs Salvage, History Check and other
What is rebuilt title?
Rebuilt title is one of the numerous branded titles assigned to vehicles the value of which is decreased for a number of reasons, such a prior accidents, water, fire or other types of damage, theft, odometer tampering, essential wear, specific types of prior use. Although the exact definition of this title brand and even the name itself differs from state to state, in most cases a Rebuilt brand is given to damaged total loss (often known as repairable salvage) vehicles which were later repaired, reinspected at a state-authorized inspection station so as to meet all the structural and safety requirements, and finally recognized roadworthy and good for public roads. Unlike Salvage vehicles, these vehicles are roadworthy. However, the market value of such cars is considerably lower than that of vehicles with non-branded titles for a number of reasons we'll dive into below.
Please note that vehicle title branding procedures, definition, requirements and specific terms differ depending on the State's law. For example, in NJ a standard title with a "salvage" suffix is issued instead of a "rebuilt" for rebuilt salvage vehicles. Other terms used instead of the "rebuilt" title are "reconstructed" or "revived". Having a "brand title" once means that the vehicle title will never be clean again and Rebuilt/Rebuilt Salvage (or another, depeniding on the state) will remain on the title for good. This is done in order to prevent vehicle buyers from overpaying for products of lower value and quality. A title washing scam by means of interstate transfer is an example of how sellers try to conceal the vehicle's brand to sell it a higher price to unsuspecting buyers. They re-register a vehicle in a state that does not recognize a branded title form another state, so the title gets clean again and the only way to learn about the prior damage and branded title is to study a VIN history report.
Is a rebuilt title bad?
A rebuilt vehicle is certainly not as bad as a salvage title from value and operability viewpoints if you want to buy it and drive immediately rather than go to great pains to fix it on your own. However, not all vehicles of this type are good and not for everyone. A rebuilt car can be a very good deal, although there are many risks associated with buying it and you'll have to consider and check them all out. We'll try to explain that in the following passage.
Remember the most important thing: for the insurance company the concept "total loss" is primarily based not on how bad the functional damage is or how much it affects safety but how estimated repair costs compare againts the current retail value of the car. Repair costs can run up really high with just multiple scratches, dents, pecks, broken glass elements, tires, costly disks or trimming, etc., and total loss car may still be intact inside (for example, a hail damaged car) and function well. In some states, such a title brand can be given to theft recovery vehicles, even if the vehicle wasn't damaged at all. When weighing all pros and cons of rebuilt vehicles, much depends on the reputability and honesty of the dealer. Some dealers purchase only those salvaged vehicles that can be properly restored because the major parts, like engine, transmission, chassis, frame were not badly damaged or remain intact and airbags were not deployed (or they insert functioning airbags). Such vehicles may be more expensive to buy for both the dealer and the end user. However, the temptation to buy a dirt cheap junk, polish it a little bit, give it excellent look, leave a lot of problems inside and sell at a good price is very strong and some dishonest dealers practice this. Some responsible rebuilderes prefer not to deal with vehicles with deployed airbags at all and dealers don't buy such rebuilt vehicles and there is a reason behind that.
You should always keep in mind the following: a reconstructed/rebuilt salvage title vehicle is not a post-overhaul vehicle (some buyers make this mistake). This title means that the vehicle has been totaled out by the insurance company because the cost of repairing that vehicle exceeded 75-100% of its actual cash value so the insurance company found it more economcally sound to pay total loss settlement. This means that a rebuilt car sold at a 50% price will never be the same as its normal counterpart (or someone was so kind as to fix a good fraction of the damage for free - maybe a Santa Claus?) Given that, you can only guess on the quality of repair. This is one of the major problems of rebuilt vehicles: estimating their actual value, safety and operability can be pretty difficult. Another matter is that certain devaluation factors like cosmetic issues, age, wear, insurance and warranty limitations are not that important for a certain category buyers who need a operable car now and at the lowest possible price and plan to keep it for a long time.
Ideally, rebuilt brand should remain on the vehicle's title permanently as it is tied to its VIN number. However, in practice this principle frequently fails because there is no unified federal law to regulate vehicle title branding. As a result, every state has its own regulations regarding vehicle title branding and recognizing vehicles junk, repairable or roadworthy.
This divergence cleared the way for the so-called "title-washing" scam, which is widely used by dishonest dealers to overcharge used car buyers for low-value or even non-roadworthy junk cars. Sometimes the new state where the vehicle is being registered does not recognize the title issued in another state and gives and new, clean title to all newly registered vehicles, even though some states require that a vehicle pass a safety inspection. Another problem is that in different states the criteria for recognizing a vehicle "total loss" and repairable vary: a vehicle issued a 'junk' title in one jurisdiction, may be deemed repairable under another state's jurisdiction. Such local legislation holes let defective cars squeeze into the market with clean faces.
That's why pre-purchase VIN checks that help track the history of the vehicle across all the states are so important, even if the current vehicle title is clean. You need to know what title the vehicle had in every state it has been registered in (and there can be many of them!). Such a vehicle certainly needs a thorough background check.
Believe or not, but a previously salvaged car can receive a clean title not just due to deliberate title-washing. Sometimes DMV employees responsible for assigning titles may forget to enter the corresponding code into the computer when registering a new vehicle, and voila - the title is clean! I also know a guy who had an opposite problem - his clean car had a rebuilt car title put by mistake into the database. He discovered it while filing and insurance claim. Fortunately, car history and inspection proved that it was actually clean.
What if I still want to buy a rebuilt car?
- Run VIN check. Don't try to save on a car history report, it's a must. Not just you finances but your and your family's safety may depend on that.
- For every state where the vehicle received a new title, check the regulations regarding title branding and, specifically, the title your potential car has been given
- For every state where the vehicle received a new title, check structural and safety requirements a registered car must meet to be recognized roadworthy,
- Hire an independent mechanic to inspect the car before you buy it and test drive it together with you. This is also a must. Remember that it's you and your family and not the mechanics that do mandatory routine state inspections who will drive that car and rely on the safety of such a vehicle.
So, what is it anyway?
This title brand is frequently misinterpreted, which prevents many used car buyers from making an informed purchasing decision and results is significant financial loss or even safety hazards (if they buy the rebuilt vehicle) or missing out a great deal (if they don't buy). This website is an attempt to explain and give definitions of this title as seen under different states' law, and review all associated risks and benefits to potential used car buyers. On our website we try to address every issue with as much detail as possible. As the answers to some questions may overlap, we will have to repeat some statements throughout our articles. Please bear with us for that. We hope this information will helo you better understand rebuilt title, choose a used vehicle with more confidence and make a safe buying decision.