By Renee Valdes

Should you consider buying one? Learn the critical differences between clean, salvage and rebuilt titles.

If you’re buying a used car, you might see the phrase “rebuilt title” in the listing. What exactly does this mean? Did the title get rebuilt, or does this refer to the car? Regardless of the definition, how might this issue affect the vehicle?

An event like Hurricane Ian last September can leave tens of thousands of cars with flood damage in its wake. Read on for an explanation of what a rebuilt title is and whether you should consider buying a used car listed as having one.

What is a clean car title?

Before learning about rebuilt car titles, it’s good to know a bit about a couple of other types of titles. If a car drove a normal life with no serious accidents, never had its odometer rolled back, and the manufacturer never repurchased it because of a defect, it’s said to have a clean title. That title is free of any title brands that denote special status and warn potential buyers of a possible problem or issue with the car.

To find out if a car experienced any accidents, obtain a vehicle history report from AutoCheck or Carfax. Reports allow free flood-risk checks and provide information like accident history and service records.

What does a salvage title mean?

Suppose a car had an accident and is declared totaled (a total loss due to accident damage) by an insurance company. In that case, a salvage title replaces its clean title. The salvage title lets potential buyers know that the car experienced an accident and it may not be safe to drive.

See: Used car values are dropping. Here’s when forecasters expect prices to normalize

What does a rebuilt title mean?

Once a vehicle gets fixed after earning a salvage title, it’s given a rebuilt title. In most cases, a rebuilt title is only provided after the car gets fixed and inspected by the state or jurisdiction that issues titles. If the repairs were satisfactory, the title is changed from “salvage” to “rebuilt” to reflect the repairs performed and note that the car is now fixed.

Does a rebuilt title affect the value of a car?

A vehicle’s resale value is affected by the type of title it has. Cars with rebuilt titles sell for much less money than their clean-title counterparts. These cars can be good deals, provided certified mechanics rebuild the vehicle properly. The challenge for potential buyers is that much of the repair work isn’t easy to inspect. If the price of any used car seems too good to be true, you should consider staying away from it.

Check the value of a car, use the tool from our sister site Kelley Blue Book.

Should I buy a car with a rebuilt title?

Since a car with a rebuilt title has been in an accident severe enough to earn it a salvage title, you might think you should avoid it altogether. And you may be right. After all, such damage can be destructive to a car’s structural integrity, even if repairs were comprehensive enough to earn this type of title.

But you shouldn’t always avoid a car with a rebuilt title. In some cases, professional repairs have been done to these cars with a quality almost as high as the factory’s standard. That means they should suffer no serious consequences compared to a vehicle with a clean title.

Read: Buying a car from the factory sounds expensive, but it can actually save you money. Here’s how to do it

How can you tell if a car is rebuilt properly?

A big problem with buying a car with a rebuilt title is that there’s no reliable way to know how well the mechanics repaired it. So, we strongly suggest having any car with a title that isn’t clean closely checked over by a competent mechanic. Have them assess the damage and check how well the vehicle was repaired.

In general, we advise typical car shoppers to avoid cars with rebuilt titles because they’ve been in major accidents. While these cars were repaired, it’s hard to know the quality of the repairs and the parts used. However, if the vehicle passes an evaluation from a trusted mechanic and the repair quality is excellent, buying a used car with a rebuilt title can be a great way to get a good deal on a used vehicle.

Car insurance for a rebuilt title

Another reason many consumers steer away from buying a vehicle with a rebuilt title is car insurance — or the difficulty of finding coverage. We suggest calling your insurance carrier to ensure they’ll offer a policy for a car with a rebuilt title.

Read: These are the cars that cost the most and least to insure

In many cases, insurance companies face trouble valuing a car with this type of title because it’s challenging to evaluate the vehicle’s pre-existing damage. Some companies may offer liability coverage. They might not want to provide comprehensive and liability coverage on a car whose integrity could be compromised and pose a risk on the road.

This story originally ran on Autotrader.com.

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(END) Dow Jones Newswires

01-31-23 0501ET

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