Rebuilt Title Fact Check
On this page, you can check which of popular statements about rebuilt vehicles are true or and which are not.
Every damaged vehicle can be repaired and get a rebuilt title.
Not true. Only rebuildable autos can get a rebuilt title. As a rule, such vehicles first have a common "salvage" or "rebuildable salvage" title, as opposed to "non-repairable", "parts only" or a greater part of "junk" titles (except for a few states, like CA, where Junk certificate is issued to repairable vehicles), which means that the vehicle cannot be repaired to be legally used on public roads and can be sold only for parts to a dismantler or a junk-yard or recycled. Basically, rebuilt vehicle title means that the damage was not so bad as to completely destroy its functionality and vehicle could be repaired, unless is was "title-washed", which can be discovered by means of VIN history check. The older the veicle at the moment of total loss event the less the damage that totales it out. The newer the vehicle, the more severe damage you may expect on a rebuilt vehicle.
Rebuilt title affects value of the car
True, the value of rebuilt title cars is lower that that of clean title cars or any other vehicles - motorcycles and motorbikes, RV, trucks of motorhomes, buses, ATV. But how much does a rebuilt title affect value? Generally, 10 to 50 percent, depends on the type of the damage (frame damage, chassis, rebuilt engine, body damage, flood, salt water, fire, hail, stripping). Just remember that resale value will be really low, and you may not be able to sell it as a trade-in at all (read more in Rebuilt title car value section)
Rebuilt title due to water / flood damage is a bad deal
True. A flood damaged vehicle may look like a good buy but electric systems may fail at any moment. Often, the failer is deferred for months or more. Rust and must are also quite unpleasant bonuses, especially in case of salt water damage.
Rebuilt title due to theft is a bad deal
Not necessarily - rebuilt title due to theft may be a good buy, as long as it's operable and got the salvage title according to the state's law. In some states, a salvage title is issued when a vehicle is stolen and found after the insurance claim was paid. Insurance companies total such vehicles. Legally, the vehicle is OK because the claim was paid and it was found. Such cars may get back on the road again. However, even if mechanically the car was not damaged (although stolen cars can be abandoned, stripped or vandalized), it will still have a rebuilt salvage title or an equivalent title according to the state's rebuilt title law, pointing to the fact that the vehicle once had a salvage title. No matter why a salvage title was issued, in most sates the law orders that an indication of a salvage history remains on the title for the entire vehicle's lifetime, until it falls into pieces, is sold for parts or recycled, or leaves the country and gets new documents according to the law of the new country of registration.
Rebuilt title registration is difficult
Not at all, although there is some added paperwork. Generally, when applying for the new rebuilt title you have to fill out a standard title application form and provide the proof that the vehicle was properly reconstructed (paid bills from the body shops, for instance). In most states you will have to provide the proof that the parts used in reconstruction do not belong to a stolen vehicle. These papers and receipts should indicate the part seller's name, license #, origin or parts, purhcase price, etc. Before a title is issued, the state authorities will inspect the car for major safety issues and verify the VIN to make sure it's not altered of faked. After that, your vehicle will be registered and get a new title. Once rebuilt title issued, the vehicle officially becomes full-fledged and roadworthy, although the branding stays for good.
Rebuilt title is the same as Salvege
Not true and that's a very common misconception. In most general case, a Rebuilt title is a repaired Savlage tile. In some states the Salvage stamp or affix will stay on the title permanently and it will be "Rebuilt Salvage" (this one causes most confusion) or "Revived Salvage" for a repaired roadworthy vehicle. However, the branding Salvage without any other specifications or suffixes saying that it was restored will point to a non-roadworthy vehicle. In some states the non-driveable Salvage titles issued on red paper blanks for less confusion.
Rebuilt title voids factory warranty
True. Unfortunately, factory warranty
for a rebuilt title vehicle will no longer be valid
because the vehicle was salvaged, regardless of the timeframe.
If the dealer tells you the warranty on a rebuilt title you are buying is not void -
run away, you have every reason not to trust that dealer and to expect any sort of scam, like title washing, or any hidden issue.
Can I resell rebuilt title as a trade-in?
In theory, yes. In practice, most dealerships will not take it as a trade-in or trade-in value will be very low.
Rebuilt vehicle is always safe to drive
Not true. All repaired totaled vehicles pass mandatory inspection at facilities and by officers empowered by local DMV before being allowed back on the road. And yet, in may states the only purpose of such inspections is to verify the VIN so as to prevent VIN forgery, and to make sure it was restored with the use of legally obtained parts. In other words, its a prevenitve measure against circulation of stolen parts in the aftermarket and means of detecting sources of illegal parts. For exxample, real rebuilt vehicle owners report missing or non-functioning airbags. This is a
Rebuilt vehicles cause legal issues because they or parts used in them were stolen.
Not true. If the vehicle was stolen and then recovered and got titled again, it has been cleared because the onwer received the insurance claim. As to parts, all of them and their origins are examined and approved as clean before the vehice gets back on the road.