What Is a Rebuilt Title and How Does It Work?

Cars with rebuilt titles are often seen as write-offs too risky to buy. But, if you have your heart set on one in your car buying pursuits, it’s best to do your research first. A title of that nature carries with it some connotations. There are implications not just for the overall mechanical wellbeing of your potential purchase, but also a number of factors. Those can range from future repair costs to insurance rates, and much more. Now, it’s time to break down just what exactly a rebuilt title is and if it can be worth it to buy a car with one.

What exactly does “rebuilt title” mean?

A wrecked BMW sitting on top of a parking bollard in a freak accident
A wrecked BMW | Lev Radin via Getty Images

So, let’s start with some terminology. As you may well know, the title of a vehicle is a piece of very important legal documentation. In essence, it tells the government, your insurance company, and others, who exactly owns this lovely piece of metal in the driveway. Other types of titles can include a “clean” title, like the one you will receive on purchasing a new car or SUV at a dealership, or a “salvage” title, meaning a vehicle is damaged and not yet repaired enough to make it drivable.

Now for the important bit. The term “rebuilt” means that a car or SUV was at one point considered to be a salvage title vehicle. This is where things can get a little muddy. Of course, you’ll have to do some research to sort out exactly what the extent of the rebuild was. Often, sellers may not know or the vehicle history report will not provide enough information. In some cases, it can be helpful to use the history report to determine where the vehicle was taken after the crash and call up the party that did the repairs.

Check with your insurance company first

A minor fender bender like this Nissan that tapped a wall in Russia can result in a rebuilt title
A fender-bender in Moscow | Sergei Karpukhin via Getty Images

With that out of the way, it’s time to talk about the implications of a rebuilt title vehicle. Furthermore, it is imperative that you know exactly what the mechanical condition of the vehicle is. You’ll want to take it to an independent shop not known by the seller and have a pre-purchase inspection done. During one of these pre-purchase inspections, the quality of the rebuild will be plain to see.

Next, you’ll have to speak with your insurance company. It’s a process no one likes going through, but it is a necessity here. Moreover, some insurance companies refuse to insure rebuilt vehicles because they were not built up again to the same standards as the manufacturer. Furthermore, depending on who did the work, the quality of the work could be better or worse than the manufacturer. So, once again, doing your homework is key. Companies like General, Progressive, and Root Insurance will in some cases help you out and insure the vehicle.

It may be worth the headache

Men in a Volkswagen plant work on an assembly line
Ensure the vehicle is rebuilt to factory standards | Hugo Amaral via Getty Images

Now, let’s talk about money. More to the point, what kind of money will a rebuilt title save you? Frankly, it depends entirely on the type of car you’re looking to buy. That rebuilt 2006 Toyota Prius is probably going to be roughly the same cash as a decently maintained one and cost you more over time in repairs. You’ll have to do the legwork to determine if the discount on retail price is worth the headache.

RELATED: The Worst Things on a Carfax Report You Never Want to See