What Is a Rebuilt Title Car and Should I Buy One?

The used car market is extremely robust these days. But while there are some incredible deals to take advantage of, there are also some cautionary tales about the perils of buying the wrong car from the wrong seller. A few of these tales include mention of “salvage title cars”, “rebuilt title cars”, and even “title washing.”

If you’re looking for a bargain, you may wonder... ‘should I buy a rebuilt car?’

In this article, you’ll learn:

• What does it mean when a car has a rebuilt or salvage title?
• Why do rebuilt cars typically sell at a lower price?
• When are rebuilt or salvage cars a good deal and how to spot a lemon.
• What’s the catch? Is the deal worth the potential headaches it may cause?

Here’s what you need to know about cars with rebuilt or salvage title.

What’s the difference between a rebuilt title and a salvage title?

The big difference between the two terms is the condition of the vehicle. ‘Salvage’ is the term used before repairs when the car is not roadworthy, while ‘rebuilt’ is the status you’ll find on a car’s title after necessary repairs and restorations have rendered the vehicle roadworthy again.

What does a rebuilt title mean exactly?

The term ‘rebuilt’ and other related terms are broad and can have different connotations and meanings. Let’s clarify a few of the words you can come across while you’re shopping for a pre-owned vehicle.

• ‘Salvage’ title refers to a vehicle that has been deemed a total loss by an insurer. It could be due to a multitude of reasons including theft, fire, flood, or collision.
• When a salvage vehicle has been repaired and certified for use on the road once again, the title can be changed to a ‘rebuilt’ status.
• The term ‘branded title’ refers to a car title that is no longer a clean title. It could be deemed a salvage, rebuilt, junk, or flood vehicle.

What are the pros and cons of buying a car with a salvage title?

Because of how a vehicle is branded with a salvage title, there can be seriously good bargains available. In most provinces, a stolen car that isn’t recovered for 21 days or more is declared a total loss and the insurer pays out the owner. If the car is recovered, it could be completely undamaged but have a title branded as salvage status. Also, vehicles that have been in accidents that haven’t been fixed can be a good deal as they are often still drivable if the damage is mostly cosmetic.

However, buying a car with a salvage title is risky business. There’s a high likelihood that damage is obscured, and you won’t find it until you’re in the process of repairs. Some salvage cars may never be roadworthy again. Salvage vehicle repairs must be inspected by a licensed technician before the car can be licensed and insured, including a structural integrity inspection, and often cars aren’t certified on the first go-round.

What are the pros and cons of buying a car with a rebuilt title?

Rebuilt cars for sale can also be a great deal under the right circumstances. Since repairs have already been completed and the vehicle certified, you can avoid the guessing game associated with salvage cars. Comparatively, a car with a rebuilt title can be purchased for 20% to 50% less than one with a clean title.

However, the flip side is that your car is worth that much less than the same model with a clean title, and it’s less desirable. Furthermore, there’s no telling how well the repairs were completed – were worn-out, salvage, or low-quality parts used in the repairs? Was it a flood vehicle that is now susceptible to premature corrosion? Was bodywork and paint done correctly, or will it begin to crumble soon after you shell out your cash? It’s a gamble.

Financing and insurance can be questionable also. Many lenders shy away from financing rebuilt and salvage vehicles due to the diminished value. And car insurance can be difficult to secure and could be expensive for the partial coverage you’re afforded.

How to determine if a rebuilt title car is right for you!

If you’ve found a car with a branded title you’re seriously considering, pause for a moment; take a deep breath. There are a few questions to ask before committing to a salvage or rebuilt title car.

• “Can I see the receipts?” If the current owner is the one who had the car repaired, request a detailed breakdown of the repairs to determine how thoroughly it was done and if quality parts were used by skilled technicians.
• “Where were the repairs completed?” Ensure repairs were done at a reputable shop. If it was done by a backyard mechanic, you’re taking your chances.
• “Have you insured it as a branded title?” You can get an idea if a rebuilt car is insurable if the current owner was able to insure it. If they haven’t, it should send up red flags.
• “Was there frame or powertrain damage?” Two areas where people tend to cut corners on repairs are the expensive ones – the frame and the engine and transmission. If these were affected in the accident, be very careful with how you proceed.
• “Have the repairs been estimated?” If it’s a salvage car you’re thinking of buying, determine if the seller has had repairs estimated already. If so, take into account the possibility of extra costs from hidden damage also.

If you received all the right answers to these questions, we still recommend asking a trusted mechanic to carry out an inspection to determine how well the car was repaired or restored. The last thing you want is to end up with a lemon car. And don’t forget to take the car on multiple test drives to make sure it handles well, runs smoothly, and doesn’t make any funny noises!

Don’t get scammed by title washing

Unfortunately, there are shady sellers on the market who engage in a technique called ‘title washing’. This illegal process involves having a branded title removed by moving and insuring it out of province. Since most provinces have their own systems for transferring titles, there’s an opportunity to transfer a car without reporting a salvage or rebuilt status. These nefarious folks then sell it as a used car with a clean title, scamming people out of thousands of dollars.

You can avoid getting scammed by title washing when you’re shopping for a used car, though. A total loss car is recorded on a vehicle history report such as Carfax.

Make sure you pull a vehicle history report on any vehicle before you complete the purchase.

To check a car’s title, record the 17-digit VIN number found on the driver’s side of the dashboard, visible through the windshield. Enter it at Carfax to receive a detailed report of the vehicle’s history including repairs, title status, and any other red flags.

Shop for used cars with peace of mind

While the potential to get a great deal is there, many rebuilt cars for sale will be more trouble than they are worth. Instead, why not look for an awesome deal from a trusted source?

With Canada Drives you can get pre-approved regardless of your credit and get connected with a local dealership in your area who will help you find your perfect car. Simply fill out the easy online form in under 3 minutes to get started!