Should You Buy a Car With a Rebuilt Title?

What might seem like a good deal now could turn into a headache later.

It is a tough used-car market, making it difficult to find the right car at the right price. You may have to make compromises on details such as mileage, color, and condition. Often deals that look a bit too good are that way for a reason. In such cases, it is possible that you’ve found a vehicle with a rebuilt title. Should you haggle accordingly or just walk away altogether?

The first thing to know is the difference between a rebuilt title and a salvage title. If a car has a rebuilt title it means it once had a salvage title because of an accident, flooding, or other significant damage, but it has since been rebuilt by a mechanic and should be road-ready.

Depending on your state, a salvage vehicle might have special requirements before it can be titled. For example, New York requires a salvage vehicle that is recovered after a theft or rebuilt after sustaining damage to be inspected by the Department of Motor Vehicles before the DMV can issue a new title. Check the current laws in your state before any purchase. 

“Generally, most car shoppers should stay away from rebuilt titles,” says Steve Elek, program leader for auto data analytics at Consumer Reports. “That being said, it could come down to a case-by-case basis. For example, you could have a car that has a rebuilt title due to heavy hail damage. That car might be mechanically sound. On the other hand, a rebuilt title could also mean the car was in a serious accident that resulted in significant frame damage.”

There are other reasons for a car having a rebuilt title, including theft and flooding. In the case of flooding, the car could have problems with the electrical system that might not emerge for months as corrosion takes its toll. Newer cars are packed with advanced electronic features and safety-related sensors that you depend on, but they are expensive to repair or replace. 

You can usually get liability insurance for a car with a rebuilt title, but you might not be able to get comprehensive coverage, which means the insurance company isn’t necessarily going to pay to replace it after a crash. 

You also want to consider resale value. If you plan on only keeping the car for a few years, you should know that selling a car with a rebuilt title usually isn’t easy. Some dealerships will accept a rebuilt title as a trade-in, but expect a low offer because the dealer will most likely send it straight to auction. And while you might be tempted to buy such a car in today’s high-demand, low-supply market, conditions will (hopefully) change in the years ahead. The next buyer may have many better-quality options. 

The bottom line is that it’s usually not worth buying a car with a rebuilt title. In terms of safety, value, and avoiding any hassles, stick with a good used car that has been inspected by a trusted mechanic and has a clean title.

To read the full article, click here.