Quick Facts About Salvage Titles and Rebuilt Titles
- In broad terms, salvage titles are for cars that require significant repair costing more than their owners’ insurance companies say they’re worth.
- A salvage title is redesignated as a rebuilt title after the vehicle passes inspection following repair and restoration.
- Buying rebuilt cars can bring excellent value, but they aren’t for everyone because of underlying risks.
A car’s title is a legal document showing the person or entity who officially owns the vehicle. Most vehicles on the used market have a clean title, which means they have never been declared a total loss by an insurance company. You might come across cars with rebuilt titles or salvage titles that have lower price tags, but why? Read on to learn the difference between rebuilt and salvage titles and get answers to questions about these types of car titles.
In general, salvage titles are issued when a vehicle’s repair cost is more than 75% of its fair market value before the damage. A car with a rebuilt title was previously totaled, but had substantial repairs to restore its roadworthiness. Laws surrounding rebuilt titles and salvage titles vary by state. Check with your state’s Department of Motor Vehicles (DMV) for the specific regulations where you live.
- What Is a Salvage Title?
- What Is a Rebuilt Title?
- Rebuilt vs. Salvage Title Differences
- How Do Cars Get Salvage and Rebuilt Titles?
- Will a Rebuilt Title Affect My Car’s Value?
- Can You Get Insurance With a Rebuilt or Salvage Title?
- Should You Buy a Car With a Rebuilt Title?
What Is a Salvage Title?
A salvage title is a title for a car that’s been in a major accident or damaged after a significant weather event. For example, tropical storms, hurricanes, and other deluges can bring heavy flooding that destroys cars. An insurance company may deem a flooded vehicle a total loss in the aftermath. However, a simple definition is not universal. States have different laws about what constitutes a salvage title. You can check your state DMV’s website for specifics.
Since automobiles with salvage titles typically aren’t roadworthy, you should only consider buying one if you’re a mechanic intending to rebuild the vehicle to pass a state inspection. Even then, consider the value proposition of rebuilding a car with a salvage title compared to buying a used car with a clean title. The cost of the repairs might be more than the car is worth.
RELATED: Should You Buy a Car That Has Been in an Accident?
Salvage Title Variations
This article provides an overview of “salvage” and “rebuilt” car title brands. You must check with your state’s DMV for specifics because some states have varying regulations, vehicle age factors, and terminology.
For example, a totaled car in California may receive a salvage certificate, not a salvage title. If your salvage vehicle is rebuilt and restored to roadworthiness, you must register it again as a Revived Salvage Vehicle.
Another outlier is South Carolina law, which has multiple title brand definitions, including salvage flood and salvage fire.
What Is a Rebuilt Title?
Cars that previously had salvage titles receive rebuilt titles after they are repaired to roadworthy condition. Although the official title status is “rebuilt,” it does not necessarily mean that a mechanic rebuilt the car from the chassis up. For a vehicle to go from salvage to rebuilt, it must be inspected by the state and deemed fully functional and safe to drive.
A rebuilt title has considerable advantages over a salvage title. When you buy a used car with a rebuilt title, it’s ready to register, insure, and drive right away without much of a headache. That typically isn’t the case with a salvage title. It’s crucial to do an in-person inspection of the car before buying a vehicle, especially one with a rebuilt title.
RELATED: Should You Buy a Car That Has Been in an Accident?
Difference Between a Rebuilt and Salvage Title
Salvage titles are for vehicles that require significant repairs to make them legally drivable and insurable. After refurbishing and passing an inspection, a once-salvage car can receive a rebuilt title. So, salvage title versus rebuilt title? A car with a salvage title needs substantial work, while vehicles with rebuilt titles have completed considerable work.
What Does Rebuilt Title Mean?
An insurance company deemed a car with a salvage title a total loss, but the vehicle was rebuilt to a roadworthy standard. The vehicle must pass a state inspection to get a rebuilt title.
What Does Salvage Title Mean?
A car with a salvage title has been declared a total loss by an insurance company and can’t be legally driven on public roads until significant repair and restoration work is complete.
How Do Cars Get Salvage and Rebuilt Titles?
A car gets a salvage title when an insurer determines the vehicle is a total loss. Insurers have different thresholds for what “totaled” means. Sometimes, a totaled car has no damage to the frame or engine. A vehicle with a salvage title is ineligible for license plates and cannot be driven on public roads.
When a car with a salvage title becomes roadworthy after necessary repairs, it can get a rebuilt title upon passing a state inspection. With a rebuilt title, you can register the car, put plates on it, and it becomes street-legal again.
Is a Salvage Title Bad?
Cars with salvage titles have been in severe accidents or through major weather events such as hurricanes or regional flooding. They usually can’t be driven on public roads. Only consider buying a used car with a salvage title if you intend to rebuild it to a roadworthy condition. The benefit is a significant discount compared to a used car with a clean title.
RELATED: Should You Buy Back Your Totaled Car?
Is a Rebuilt Title Bad?
Cars with rebuilt titles have been restored to a roadworthy state. This status means they’re immediately ready for you to drive, but the accident history will always negatively impact their cash value.
Will a Rebuilt Title Affect My Car’s Value?
Yes, a car with a rebuilt title will always be worth less than the same model with a clean title. A vehicle with a clean title has never been in an accident severe enough to be deemed a total loss by an insurance company. Even if a car with a rebuilt title is repaired to the highest standard, it will always have a nasty accident in its past, bringing down its cash value.
If you’re trying to sell a car with a rebuilt title, we regret to inform you that you’ll get less money than if it had a clean title. Potential buyers will likely have questions about the vehicle’s condition. Your transparency will bring better odds of attracting the right buyer and getting a relatively reasonable sale price.
MORE: Used Car Buying Guide
Can You Get Insurance With a Rebuilt or Salvage Title?
Most insurance companies will insure a car with a rebuilt title, but you may not be able to get full coverage. If you have a clean driving record, there won’t be much insurance cost difference between a car with a clean or rebuilt title. Try to get a quote from your insurance company before buying the car, and make sure they know it has a rebuilt title.
In most cases, you cannot get insurance on a car with a salvage title because it’s not legal to drive on public roads.
Should You Buy a Car With a Rebuilt Title?
- It depends. Not all cars with rebuilt titles are created equal. If you’re considering buying a car with a rebuilt title, obtain a vehicle history report and ask the seller plenty of questions about the car’s past and the repair process.
- Look for a transparent seller. If the seller can satisfactorily answer your questions, has a good knowledge of the car’s past, and can provide photos of the car after the accident and before the repairs, then it could be worth buying. If the seller is dodgy, walk away.
- Know the risks involved. Even when a seller is open and honest, dealing with a rebuilt title can be risky. There could still be an underlying issue caused by the accident that went unnoticed. If you’re unwilling to take that risk, paying more for a similar car with a clean title is worth the extra money.
- Obtain a professional inspection. When considering a car with a rebuilt title, it always helps to be mechanically inclined so you know what to look for when checking it over in person. If you don’t know much about cars, consider a pre-purchase inspection before agreeing to buy any automobile, especially a vehicle with a salvage or rebuilt title.
MORE: Top Questions You Should Ask a Private Seller
Pros of Buying a Car With a Rebuilt Title
Buying a vehicle with a rebuilt title is an opportunity to pay much less money for a used car in good condition.
Cons of Buying a Car With a Rebuilt Title
Rebuilt cars often have enticing prices, but they may come with drawbacks.
- Some damage might not be immediately evident. For example, corrosion from floodwaters can cause problems with the electrical system months after the visible water damage is repaired.
- Selling or trading your vehicle with a rebuilt title can be difficult. Dealers won’t give you top-dollar as a trade-in because the car will likely go to auction instead of a spot on the dealership lot. A private sale is possible, but many buyers steer clear of rebuilt titles.
- Your insurance company might deny comprehensive coverage and provide only liability insurance for cars with rebuilt titles.
Editor’s Note: This article has been updated since its initial publication.
This is wrong. Salvage title in Ca means means only that it’s pink slip title is branded “salvage” on the face of it. If a car in Ca is titled it is running, driving, registered, etc… Ca ins companies do not issue a salvage title. Only DMV can issue that once the car has been repaired and inspected following an issuance of total loss reported by ins company. When a Ca car becomes totaled it does not have title.
From the driver’s perspective then (after it’s repaired and inspected), is there no real differences besides insurance coverage then?
YoUr DeFiNiTiOnS DoEsN’t MaTcH CaLiFoRniA. ThErEfoRe ItS wRoNg.
It also isn’t true in North Carolina. We had a car for nealry a year with tags (including passing the state inspection) and insurance that was a salvage title – the only reason we don’t have it still is that our son crashed it a second time to the point it was undriveable.