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Rebuilt Title vs. Salvage Title: What’s the Difference?

The title to a car is a legal document that shows who officially owns the vehicle. Read this article to learn the distinction between rebuilt and salvage titles and get answers to common questions about these types of car titles.
Rebuilt Title vs. Salvage Title: What’s the Difference?

The title to a car is a legal document that shows who officially owns the vehicle. Most used vehicles have a clean title, which means they were never declared a total loss by an insurance company. You may come across vehicles with rebuilt or salvage titles with lower price tags, but why? Continue reading to learn the distinction between rebuilt and salvage titles and to get answers to common questions about these types of car titles.

The laws governing rebuilt and salvage titles differ from state to state. For local regulations, contact your state’s motor vehicle department.

What is a salvage title?

A salvage title is one for a vehicle that has been in a major accident or has been damaged as a result of a major weather event, such as a hurricane. Tropical storms and hurricanes cause extensive flooding. In the aftermath, an insurance company may declare a flooded vehicle a total loss. The definition, however, is not universal. Different states have different laws regarding what constitutes a salvage title. To find out more, go to your state’s DMV website.

Because cars with salvage titles aren’t usually roadworthy, you should only consider purchasing one if you’re a mechanic who plans to rebuild it to pass a state inspection. Even so, consider the value proposition of rebuilding a salvage title car versus purchasing a used car with a clean title. The cost of repairs may exceed the value of the vehicle.

What does salvage title mean?

A vehicle with a salvage title has been declared a total loss by its insurer and is therefore illegal to operate on public roads.

What is a rebuilt title?

Cars with salvage titles are given rebuilt titles once they have been repaired to roadworthy condition. Although the official title status is “rebuilt,” this does not always imply that the car was rebuilt from the chassis up. To go from salvage to rebuilt, a vehicle must be inspected by the state and deemed fully functional and safe to drive.

A rebuilt title has significant benefits over a salvage title. When you purchase a used car with a rebuilt title, it is ready to register, insure, and drive right away. That isn’t always the case with salvage titles. Before purchasing a vehicle, especially one with a rebuilt title, it is critical to conduct an in-person inspection.

What does rebuilt title mean?

A vehicle with a rebuilt title was judged a total loss by an insurance provider, but it was repaired to a roadworthy condition. In order to obtain a rebuilt title, the vehicle passed a state-mandated examination.

How do cars get salvage and rebuilt titles?

When an insurer determines that a vehicle is a total loss, a salvage title is issued. Different insurers define “totaled” differently. A totaled car may not have any 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 obtain a rebuilt title after passing a state inspection. With a rebuilt title, you can register the car, put plates on it, and it will be street legal again.

Will a rebuilt title affect the value of my car?

Yes, a rebuilt title car is always worth less than the same model with a clean title. A vehicle with a clean title has never been in a serious enough accident to be declared a total loss by an insurance company. Even if a car with a rebuilt title is meticulously repaired, it will always have a harrowing accident in its past, lowering its monetary value.

If you try to sell a car with a rebuilt title, you will receive less money than if it had a clean title. Potential buyers will almost certainly have concerns about the vehicle’s condition. Your openness will increase your chances of attracting the right buyer and obtaining a reasonable sale price.

Is it possible to get insurance with a rebuilt or salvage title?

Most insurance companies will insure a car with a rebuilt title, but full coverage may not be available. If you have a clean driving record, the insurance cost difference between a car with a clean or rebuilt title will be minimal. Before you buy the car, try to get a quote from your insurance company, and make sure they know it has a rebuilt title.

Most insurance companies will refuse to insure a vehicle with a salvage title because it is not legal to drive on public roads.

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