What is the Difference Between a Salvage Title and a Rebuilt Title?

The certificate of title for a vehicle is an official document establishing proof of ownership. The owner may be an individual, multiple individuals, a lender, or someone else. Most cars have a clean title, meaning no record indicates the vehicle has been significantly damaged or is unsafe to drive. However, some cars have a salvage or rebuilt title. What does this mean? Is it safe to drive a car with one of these titles? Find the answers to your questions here.

What is a Salvage Title?

A salvage title is issued after an insurance company has deemed a car a total loss following an accident, flood, theft, or another incident. This type of title indicates the vehicle is unsafe to drive, making it ineligible for license plates and illegal to drive on public roads.

What is a Rebuilt Title?

A car may be issued a rebuilt title after being repaired. It is no longer “totaled” and can now be licensed, registered, and insured without much difficulty, though the costs may be higher. It’s also legal to sell a car with a rebuilt title.

How Does a Title Go from Salvage to Rebuilt?

A salvage-title vehicle must undergo significant repairs to become roadworthy again and receive a rebuilt title. Then, the car must pass numerous tests and inspections to prove it’s fully functional and safe to drive once more. Be aware that it’s not always possible to repair a salvage-title car.

How Much Does a Salvage or Rebuilt Title Affect a Car’s Value?

Even if a car with a rebuilt title has been repaired to the highest standard, it will always have a bad accident history, bringing down its resale value by an estimated 20 to 40%.

Should I Buy a Car with a Rebuilt Title?

Cars with rebuilt titles often sell for much cheaper than those with clean titles, so you may be tempted by the low sticker price. However, it’s vital to ask the seller plenty of questions about the car’s history and repair work. Only consider the purchase if the seller can answer your questions to your satisfaction and show pictures of the damage before and after the repair.

You may also want to have a pre-purchase inspection. Even if the mechanic signs off on the car, understand that you risk driving a less reliable vehicle that may not last. If you’re not willing to take this risk, paying a little extra for a car with a clean title could be worth it.

You should also know that if you’re hoping to take out a title loan, you must present a clean title to the lender. This is yet another reason to avoid buying a car with a rebuilt title.

To learn more about what it takes to get a title loan, please call VIP Title Loans at 817-265-2274 or fill out our online contact form. You can also visit one of our five locations in the DFW Metroplex to get fast cash on the spot.