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Q

What is a rebuilt title or a salvage title?


A

The definition of a rebuilt title or salvage title depends on the state in which you live and laws specific to that state. 

A good general definition for a rebuilt title (used by CarFax and others) is:

A "rebuilt title" is placed upon a rebuilt or reconstructed vehicle that previously was a salvage vehicle but has now been repaired and restored to operation. These vehicles are often severely damaged before they are rebuilt, and refurbished parts are typically used during reconstruction. In most states, an inspection of the vehicle is required before the vehicle is allowed to return to the road.

Normally, a car becomes a salvage vehicle after an insurance company has declared it to be a total loss after an auto accident.  It then can be sold ("AS IS") to an automobile rebuilder to be used either for parts or to be restored ("rebuilt").

In general, a salvage vehicle cannot be driven on the highways or have a valid license plate.  A salvage vehicle must be repaired (if that is possible) to become a rebuilt, roadworthy vehicle.  (See "Salvage and rebuilt titles: What you need to know")

Guidelines for rebuilt vehicles vary

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If the vehicle is restored, in many states it must be inspected and ultimately a "rebuilt title" can be issued for the vehicle from the state’s Department of Motor Vehicles (DMV). A reconstructed vehicle with a rebuilt title CAN be driven on the highways. The guidelines for getting a rebuilt title vary by state.

For example, the state of Florida requires a vehicle to have a salvage title if the insurance company declared the vehicle a total loss. These titles generally indicate whether the vehicle is "rebuildable" (can be repaired and driven) or "not rebuildable" (must be sold for parts).

In some other states, they “brand” or mark the vehicle's title when the estimate of damages reaches a certain percentage of the vehicle's retail value (New York and Louisiana, designate it at 75 percent).

The rules can be complex for rebuilt and salvage vehicles. For example, the Georgia Department of Revenue notes that anyone who purchases a salvage or wrecked motor vehicle for the purpose of restoring or rebuilding it must be licensed as a rebuilder.

In Nevada, vehicles that have had certain repairs must be titled as rebuilt even if they don’t meet the definition of a salvage vehicle. This applies to any vehicle that has had one or more of the following major components replaced:

  • Cowl assembly
  • Rear clip assembly
  • Roof assembly
  • Floor pan assembly
  • Conventional frame coupled with one additional major component
  • Complete front inner structure for a unibody

Before purchasing a rebuilt vehicle, it should be thoroughly checked out by your own mechanic. You also should check to see if the car can be insured with your current insurer since their underwriting rules may not allow them to write policies for cars with salvage or rebuilt titles.

Many auto insurance carriers simply don’t offer policies for rebuilt cars.  Or, if a policy is offered, it may be only for liability and not all types of car insurance -- such as collision and comprehensive coverages --because it’s too hard to determine a rebuilt car’s true value.

If you purchase a vehicle with a rebuilt title you’ll have to shop around and compare car insurance rates to find the right car insurance company for your needs.  Look for insurers, such as Progressive, that allow full coverage on cars with branded titles.  




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23 Responses to "What is a rebuilt title or a salvage title?"
  1. volkswagen accessories

    This is really an interesting post as it focuses on the very important topic. I learned a lot.

      Reply»  
  2. Gina

    We recently purchased a motor home with a salvage title in Iowa and brought it to Texas where it was inspected (very strict inspection requirements in Texas), titled and tagged without any problem. It had water damage from a roof leak that wasn't noticed for quite some time because it had been in storage. It was not in a flood or submerged in water. If you check EBay there have been and are thousands of vehicles for sale with salvage titles and those vehicles are tagged and titled all the time without having a "rebuilt" title.

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  3. Sara

    Regarding the definition, "these vehicles are often severely damaged before they are rebuilt," it's not true. I have seen scratch cars being totaled or broken window vehicles that have been totaled. Also theft recoveries that were never involved in an accident. The cars become salvage when the insurance pay for them. That's all it is. It doesn't mean that they are severely damaged. There are many with minor cosmetic damage. I have always bought rebuilt vehicles because I save up to 30% today. The car is never an investment and it will always lose its value.

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    1. joseph Coles April 26, 2013 at 11:58 AM

      It's true. I had a Honda Accord 1999 that got hit by a truck and then caused me to impact the vehicle in front of me. I did an inspection of the car after impact and drove back home. The insurance company totaled my car and paid me. Also, they let me keep my car, got a salvage title. Only damage to my car was truck and hood, but because paint was fading they declined to pay to fix it. I sold the car with salvage title.

        Reply »  
  4. MICKEY GRAVES

    In Georgia, you no longer need a rebuilder's license to rebuild an auto. They've changed it so now any individual may now do it if they have the proper paperwork.

      Reply»  
  5. Visitor

    I am rebuilding a BMW M3, it has front end damage. I have to replace the front body panels and was thinking since I'm already replacing the front can I install aftermarket parts like a carbon fiber GTR hood instead of the boring factory piece?

      Reply»  
  6. Visitor

    I own a 2007 pretty Chrysler Crossfire in good excellent operable condition. I got the car with only 5800 miles on it and now at 12,600 and it still runs like a dream. It was wrecked and repaired with genuine parts and looks like normal. This car in the market with 40,000 miles is $10,000 above what I paid.

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  7. Visitor

    Rebuilt titles or totaled cars is something I really avoid, it is cheaper, yes, but we can never be too sure and there are some used cars out there with regular title but if you run a VIN check, voila, it's salvage! I run a VIN check myself no matter what the owner says. It's just $10 or so.

      Reply»  
  8. Visitor

    I own a 2003 vehicle in excellent running condition with 52000 miles. It was wrecked and completely repaired. I have a salvaged title. Hope to drive car for many more years and miles.

      Reply»  
  9. Anonymous

    I could not find answer to my question. What to do if the car you purchased from a private owner knowingly sold you a salvaged car but did not have salvaged title.

      Reply»  
  10. Anonymous

    Great

      Reply»  
  11. Anonymous

    Usually the value of a rebuilt tittle or savage tittle is 1/3 of the KBB.

      Reply»  
  12. Anonymous

    thanku so much helped alot.8 is

      Reply»  
  13. Anonymous

    thanks for the info.

      Reply»  
  14. Anonymous

    NEEDED TO KNOW YOU ROCK!

      Reply»  
  15. Anonymous

    Not true and not how it is in the real life...

      Reply»  
  16. Anonymous

    Very informative!

      Reply»  
  17. Anonymous

    thanks,

      Reply»  
  18. Anonymous

    Once a salvage title has been changed to rebuilt salvage can it ever be changed to a clear title. There was never any damage, however it was stolen and later recovered by the insurance company.

      Reply»  
  19. Anonymous

    The info was helpful, but some of the clarity was horrible.

      Reply»  
  20. Anonymous

    this answer helped me a lot. Thanks. I just now got to find out what are the qualifications for michigan rebuild title before I purchase vehicle.

      Reply»  
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