Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florid...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 3, 2021

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At a Glance

  • A rebuilt title is what is given to a car after it has previously been damaged beyond repair 
  • There are both pros and cons to purchasing a car with a rebuilt title 
  • It is harder to insure a car with a rebuilt title, but not impossible 

What is a rebuilt title, and is it a bad thing? It all depends. Having a car with a rebuilt title has its pros, but like everything else, it has its cons as well. 

When a car leaves the dealership lot, it has a clean title. These are the cars that are easiest to insure and pose the least risk. 

Car insurance rates with a rebuilt title will vary by the insurance company, but ultimately it comes down to what kind of shape your car is in. 

Find the best insurance company for your car with a rebuilt title. Enter your ZIP code and get a free quote today. 

What is a rebuilt title?

A car with a rebuilt title is a car that has previously been damaged beyond repair.

When purchasing a car from a dealership, it comes with what is called a clean title. This means the car has never been totaled, the odometer of the car has never been rolled back, and the vehicle has never been a part of any manufacturer buyback.

Once you total a car, the clean title is taken from it and it receives a salvage title. When a car has a salvage title, this just means that it has suffered significant damage. Sometimes, cars that are totaled are not repaired, but when they are, they will no longer have the salvage title. In that case, they will have a rebuilt title.

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What should I know before purchasing a car with a rebuilt title?

Purchasing a car with a rebuilt title can be a good thing or a bad thing, you just have to know exactly what to look for.

As with everything in life, you will want to consider the pros and cons.

A pro to buying a car with a rebuilt title is the possibility of saving money. The price difference between a car with a rebuilt title and the same exact car with a clean title will be anywhere between 20% and 40%. The car must be able to pass an inspection. This is another pro because you will be able to feel confident with your purchase knowing that an inspection has taken place.

Someone who owns a car with a rebuilt title may have difficulty reselling it. They will also make less of a profit since the vehicle will be of lesser value. Another con is that the car may be a “lemon.” So should you buy a car with a rebuilt title? You should think twice before purchasing if the vehicle has the following issues:

  • Large dents and crushed fuel lines under the car
  • An airbag light that doesn’t work
  • Uneven tire treads
  • Hood, trunk, or doors that do not close properly

Before purchasing, you should ask some questions about the car. The first question you should ask is how the car was damaged. Knowing how the car was damaged can give you a more clear picture of how serious the damages were.

You’ll also want to ask how the car was repaired and who did the repairs. Make sure you ask if the frame is properly aligned. A misaligned frame can put a strain on a vehicle’s systems.

Ensure that you know if a certified mechanic examined the car or not. Lastly, reach out to your insurance company and ask if they are willing to cover a car that has a rebuilt title.

Can I insure a car with a rebuilt title?

Cars with rebuilt titles can be a little more difficult to insure. A rebuilt car is liable to bring you higher rates with lower payouts. This is because the vehicle is less valuable. Also, there is an elevated risk of failure because there may be hidden damages not found during the inspection. As we know, an insurance company’s number one goal is to stay away from risky clients and situations. 

Insuring a car with a rebuilt title can be a little more difficult than insuring a car with a clean title. Some companies are hesitant to issue a full coverage policy because of the risks that come with the car. They will be more likely to write a liability policy — a policy that pays for bodily injury and property damage caused to other people in an accident. 

It will be difficult for you and your insurance company to agree on optional coverage, such as collision and comprehensive, because it may not be clear how some of the damage to the car happened or what all has been repaired.

Car insurance companies realize the risks of insuring rebuilt car titles could end in insurance claims.

There are three specific steps that you want to take in order to get cheap automobile insurance.

  1. Compare multiple rates when you are shopping for insurance 
  2. Know that some insurers will add a surcharge of up to 20% for insuring a car with a rebuilt salvage title 
  3. Reconsider your options if the amount you’ll pay for car insurance exceeds the amount you’ll save by purchasing a rebuilt salvage car

If the pros outweigh the cons for your car with a rebuilt title, find an insurance company that best fits you. Enter your ZIP code and get a free quote today. 

 

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