A rebuilt title can significantly bring down the value of a vehicle because it indicates that the car had been declared salvaged due to serious damage, theft, abandonment or another form of total loss.
Cars with rebuilt titles are worth less than a car that has a clean title and has not been in an accident serious enough to be a total loss. Generally, a vehicle with a salvage or rebuilt title can be worth thousands of dollars less than one without this type of title.
When it comes to rebuilt titles, it’s natural to have questions. How much does a rebuilt title affect value? Does a rebuilt title affect insurance? And how much are salvage title cars worth? Learn the answers to these questions and more below.
- A rebuilt title is given to a vehicle that was earlier salvaged because of serious damage, abandonment, theft or another form of total loss, but was later refurbished and certified for safe road use.
- A rebuilt title can decrease a vehicle’s value significantly, often between 20% and 40%.
- You may pay more for auto insurance if you have a vehicle with a rebuilt title.
What does a rebuilt title mean?
A rebuilt titles means a vehicle had earlier been declared salvaged due to significant damage, theft, abandonment or another form of total loss, but was later restored and certified for road use.
“If a vehicle has a rebuilt title, it means it has sustained serious damage at a previous point and has been refurbished,” says Ben Michael, an attorney with Michael & Associates, a criminal defense law practice in Austin, Texas. “Rebuilt titles offer drivers a way to get a vehicle, usually at a much lower cost. But it does come with some risk.”
Think of a rebuilt title like a car’s second chance.
“The insurer might declare it a total loss. But that doesn’t always mean it’s scrap metal. Sometimes, with extensive repairs, the vehicle can be restored. After those repairs and a rigorous inspection, the state can give it a ‘rebuilt’ title,” says Samuel Greenes, CEO of BLUE Insurance in New Jersey.
How much does a rebuilt title devalue a car?
Auto and insurance industry sources report that the decrease in value of a vehicle that has a rebuilt or salvage title is typically between 20% to 40%, depending on the type of vehicle, its age, the amount of damage it had sustained and the local automotive market.
“The value of a car with a rebuilt title will largely depend on the damage the vehicle sustained. The more the auto needs to be rebuilt, the lower the cost,” Michael says.
According to Geoff Cudd, consumer advocate and owner of FindTheBestCarPrice.com, there is a logical reason why rebuilt titles generally devalue a car significantly.
“It has to do with the uncertainty around the extent and quality of repairs,” he says. “Buyers are often wary of the potential hidden damages that could arise.”
It’s recommended that you have a private appraiser determine the market value of any rebuilt title car you are considering buying.
Is a car with a rebuilt title safe to drive?
A car with a rebuilt title may be safe to purchase and drive, but the vehicle should be thoroughly inspected by a trusted mechanic to check that all repairs were properly executed and that the auto is in good condition, Cudd says.
“Safeguard yourself and get a detailed vehicle history report and a thorough pre-purchase inspection by a trusted mechanic before buying and driving a car with a rebuilt title,” Greenes says.
What is the difference between a clean title and a rebuilt title?
The key distinction between a rebuilt title and a clean title lies in the vehicle’s historical details.
“A clean title implies that the vehicle has never had severe damage, was not stolen or was not reported as salvaged,” says Jonathan Feniak, general counsel at Cloud Peak Law Group in Sheridan, Wyoming.
A clean title should give you peace of mind that the vehicle’s history is virtually spotless, with no major accidents or insurance write-offs.
“A rebuilt title indicates a red flag about the car’s past. Rebuilt titles can be OK, but it’s all about knowing the details of that past damage before committing to the car,” Greenes says.
How much does a rebuilt title affect car insurance rates?
Make no mistake: You will pay more for auto insurance if you have a car with a rebuilt title.
“Most major insurers will still cover a car with a rebuilt title, but be prepared for higher premiums,” Greenes says. “Since there is more risk involved, you’ll usually pay more. But the exact amount will vary by company and depending on the car’s specific history.”
Feniak cautions that getting full coverage for your vehicle from an insurer may not be easy, and the amount insured is typically based on the lower post-damage value of the car.
Are rebuilt title vehicles worth it?
Whether or not buying or keeping a car with a rebuilt title is worth it will hinge on many factors.
“If you are on a tight budget, and especially if you are mechanically inclined and can do your own maintenance and repairs, it can be worth it,” Greenes says. “But if you are looking for a hassle-free car that will hold its value, a rebuilt title vehicle is probably not your best bet.”
Keep in mind that if you already own a car with a rebuilt title, selling it can be challenging.
“Selling requires full disclosure to the buyer and typically yields a lower resale value compared to similar models with clean titles,” Cudd says.
What are the cons of buying a vehicle with a rebuilt title?
Any car that has been seriously impaired and then restored comes with plenty of risks.
“If the vehicle’s frame was damaged, it’s not likely going to be worth your money to purchase the car. But most other damage can be fixed to a level that likely won’t be an issue for many drivers,” Michael says.
There’s always that lingering uncertainty you may have about past damage, the possibility of hidden problems and worries about reselling the vehicle down the line.
How much does insurance pay for a totaled car?
What an insurer will pay for a claim involving a totaled car can vary, depending on the carrier, the car’s value and other factors. To get an idea, you can refer to the vehicle’s Kelley Blue Book fair condition value. A totaled car may be worth between 20 to 40 percent of this fair condition value. Ultimately, the payout will be up to the insurance adjuster assigned to your claim and your carrier.
From 2010, 2014 and 2018 claims data (the most recent research available), the Insurance Research Council has determined the following:
Comprehensive claims payouts for total loss
The average payment for comprehensive claims with totaled vehicles was $8,173 in 2018, more than five times the average payment of $1,496 among claims where the vehicle was not totaled, according to the Insurance Research Council.
The totaled vehicle comprehensive claims cost has risen much faster than minor claims. From 2010 through 2018, the average claim payment for a totaled vehicle increased by an annualized rate of 7.5%, compared with little change among comprehensive claims without a total loss.
In terms of the percentage of dollars paid, the share of dollars for totaled vehicles has risen from 24% in 2010 to 34% in 2018.
Collision claims payouts for total loss
The average payment for collision claims with totaled vehicles was $10,484 in 2018, more than three times the average payment of $3,286 among claims where the vehicle was not totaled. In terms of the share of total claim dollars paid, nearly half (47%) of the cost of all collision claim payments was due to total loss claims, up from 43% in 2010 and 42% in 2014.
Property damage liability payouts for total loss
The average payment for property damage liability claims with totaled vehicles was $6,625 in 2018, more than double the average payment of $3,130 among claims where the vehicle was not totaled. In terms of the share of total claim dollars paid, nearly one-quarter (24%) of the cost of all property damage liability claim payments were due to total loss claims, up slightly from 23% in 2010 and 20% in 2014.
Is there a specific amount deducted for being rebuilt?
While there is no specific percent or amount of actual cash value that all insurance companies use for calculating the value of a rebuilt title car, it will be worth less than a car with a clean title. Remember: The typical drop in value of a vehicle that has a rebuilt or salvage title is often between 20% to 40%.
Due to the title type, the vehicle’s diminished value will most certainly decrease your settlement amount if you get actual cash value for a car with a rebuilt title in an auto accident claim.
You could discuss this issue with a local dealership to know what the rebuilt title or salvage title value would be compared to a clean title value for a specific model car. A dealer should be able to give you a reasonable idea of the difference between comparable cars with a clean title and a rebuilt title.
If you are considering buying a rebuilt title car, read our guide on how to insure salvage or rebuilt title vehicles.
Frequently asked questions
How do you sell a car with a rebuilt title?
Trying to sell a vehicle with a rebuilt title can be challenging, Greenes says. For best results and to attract more buyer candidates, offer to sell it at a lower and more appealing price based on fair market value and its condition. Consider providing a vehicle history report via a service like CARFAX or AutoCheck, or obtain a report from your local Department of Motor Vehicles.
Additionally, gather and furnish documentation of all repair work, including copies of receipts. Be transparent with the buyer, and don’t try to hide the title status.
How does a rebuilt title affect a car’s resale value?
A vehicle with a rebuilt title is typically worth a lot less than a similar make, model and year with a clean title. Insurance and auto industry sources indicate that the decrease in value of a vehicle that has a rebuilt or salvage title is often between 20% to 40%, based on the type of vehicle, its age, the amount of previous damage and the local automotive market.
Is there a specific amount deducted for being rebuilt?
There is no particular formula used across the industry to determine the deducted value of a car with a rebuilt title. If you are considering selling a vehicle with a rebuilt title, experts recommend using Kelley Blue Book, looking up that model’s fair value, and then pricing the car based on 20% to 40% of this fair condition value.
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