Question: What does it mean when I see a car for sale with a rebuilt title? Do you have to be a certain age to drive and insure such a car?
Answer: Vehicles with rebuilt titles take the same training as any other passenger vehicle to drive. You don’t have to be a certain age or have a special license to drive them. At whatever age your state allows you to operate a car, you can drive a car with a clean or rebuilt title at that age, following all the restrictions your state has on you as a young driver.
Vehicles with rebuilt title are special, though, because they have previously been labeled salvage vehicles by the state.
A salvage vehicle is one that has been in an accident and damaged, possibly quite severely, so that an auto insurance company decided to total it out. (See here our top questions about salvage and rebuilt titles).
Insurance companies total out vehicles when they cannot be fixed or would cost too much for the insurer to repair, so they pay owners actual cash value instead. Totaled-out vehicles are usually given salvage titles by the state and then sold at auction.
If a salvaged car is repairable, then in most states it can be bought, repaired and receive a rebuilt title; typically, this includes going through an inspection to show that the car is again roadworthy. (See "5 reasons to avoid salvage-title cars.")
While allowed back on the road, rebuilt titled cars are not valued the same as a car that has had a clean title. This makes rebuilt cars harder to insure, especially for physical damage coverages of collision and comprehensive, though some big insurers like Progressive do allow it.
If you are under 18, it gets even trickier because you need to find a car insurance company that will insure a rebuilt vehicle and will offer a policy to a minor. You may instead want to stay on your parent’s policy if that’s possible.
When buying a car, it’s wise to check on the vehicle’s history by getting a report from a reputable company like CarFax or AutoCheck. This should tell you if the car has a rebuilt title, in case the seller didn’t disclose it, and perhaps tell what type of accident caused the car to have a branded title.
Rebuilt vehicles generally come with cheaper price tags, so they can be enticing to young drivers looking for their first vehicle; however, before buying such a car, it’s smart to uncover the type of accident it was in, its real value, and if you can get car insurance on it. Then you can determine if it’s the right car for you.