With how high used car prices are these days, potential buyers are undoubtedly looking for any way to save some cash. But just because a car buying strategy saves you money initially doesn’t necessarily mean you should use it. For example, getting a car with a salvage title. However, what about doing something that I just did—buying a used car with a rebuilt title?
What are the upsides and downsides of buying a car with a rebuilt title?
While all car titles establish vehicle ownership, not all types of titles indicate the same things. A salvage title, for instance, means that a car has been damaged so badly, repairing it would cost more than the car is worth. Alternatively, it’s because the insurance company determines the car has lost well over half of its market value, Car and Driver notes. Regardless, insurance companies typically declare these cars ‘total losses’ because they decide repairs aren’t worth considering.
However, getting a salvage title doesn’t mean a used car goes to the scrapyard. Often, these cars are sold through insurance auctions. And while they can’t be driven on the street or insured in that condition, they can be repaired and re-certified for road use. At that point, the salvage title is replaced with a rebuilt title. In short, used cars with rebuilt titles are literally rebuilt salvage-titled cars.
Buying a used car with a rebuilt title has some upsides. For one, it’s cheaper than getting one with a clean title. Also, unlike cars with salvage titles, these vehicles are street-legal. Plus, while not every insurance company covers them, cars with rebuilt titles can be insured.
But getting a used car with a rebuilt title carries some potential risks. Firstly, the lower resale value also applies when you try to sell the car, J.D. Power notes. Most importantly, though, there’s no inherent guarantee that the repairs were done properly. To be fair, most states only issue rebuilt titles after performing safety inspections. Some go even further and require rebuilding licenses. However, not all of them do either.
Plus, there’s no nationwide inspection standard. So, what one state considers a ‘rigorous’ inspection might be barely more than a quick look-over. And that leaves you with a potentially unsafe vehicle that could need more repairs down the road.
I bought and insured a used Fiat 500 Abarth with a rebuilt title
With all of that in mind, I decided to buy a used car with a rebuilt title anyway. Specifically, the used 2013 Fiat 500 Abarth in the photo above. Admittedly, I’ve only had it for a few days. And the safety inspection isn’t until the beginning of September. But so far, there’s nothing about it that indicates it’s anything other than a well-maintained 500 Abarth. And I have every confidence that it will pass that inspection.
There are several reasons for my confidence. For one, Illinois requires both safety inspections and for rebuilders to hold professional licenses. The state also requires the rebuilders to provide a list and invoice for all the parts replaced during the repair, Auto Auction Mall notes. In addition, before giving me full coverage, my insurance company ran the VIN to make sure the Abarth’s history checked out.
Furthermore, my Fiat 500 Abarth wasn’t severely damaged. In the photos the shop provided, the hot hatch had a damaged hood and a cracked bumper hanging off at one end. That’s it; the airbags didn’t even deploy. And yes, that’s enough damage for an insurance company to issue a salvage title, Cars.com says. In other words, while my car had some cosmetic damage, the chassis and powertrain were untouched.
Oh, and speaking of the shop, I bought my Abarth at a restoration shop called Roadster Salon. It specializes in classic Italian sports cars, particularly Alfa Romeo and Fiat Spiders. It even does EV conversions. But it also works on Ferraris, Maseratis, MGs, Triumphs…and Fiat 500 Abarths. And given that Roadster Salon has a multi-year waiting list and excellent reviews, I think my 500 is solid.
Is this a used car buying risk worth taking?
Although I’m confident in my decision to buy a car with a rebuilt title, I’m ultimately one data point. There are undoubtedly used vehicles with rebuilt titles that are dangerous, flawed rides. So, as with any used car, a pre-purchase inspection is recommended.
It’s worth noting, though, that my Fiat 500 Abarth doesn’t just have a new hood and front bumper. Roadster Salon also installed new tires, refreshed the suspension and brakes, checked the powertrain, and, on my request, replaced the leather seats with cloth ones. And I still paid a fair market value for it. In my case, buying a used car with a rebuilt title wasn’t a bad idea.
It might not be a bad idea for you, either. As is the case with many car-buying decisions, it all depends on due diligence and research.
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