Is it Safe to Buy a Car With a Rebuilt Title?

Before a certificate of title can display that a vehicle has been rebuilt, the car will have been written off as a total loss by an insurer and with a title marked “salvage.” This designation makes the car illegal to drive until it passes an inspection by a state official and the title is upgraded to “rebuilt”. Despite being declared street legal, a rebuilt vehicle is generally considered a high-risk purchase. However, because of the variety of reasons for a car being tagged with a rebuilt designation, there are certain instances where the purchase of a vehicle with a rebuilt title can work out well for the new owner.

The biggest risk of buying a car with a rebuilt title is that the parameters of the state inspection that will deem the vehicle as roadworthy are limited. Generally, these inspections focus on two primary factors; that the damaged parts of the vehicle have been repaired or replaced and that the replacement parts were not stolen. For example, the requirements to pass an inspection in California include receipts for replacement parts and a certificate for passing a brake and light inspection. If airbags were deployed, receipts for proof of replacement will be required as well. If the car passes these tests the title will be changed to "revived", which is the equivalent of a rebuilt designation. Despite being deemed as street legal after the inspection, the only way to get a full risk profile for the vehicle is to have a mechanic do an independent assessment.

States including Arizona, Oregon and New York, will tag a vehicle with a salvage title when it has been recovered after being stolen, even if damage to the car is minor. After passing the required inspection by the state, the title will be changed to either “rebuilt title: theft recovery” or “rebuilt title due to theft.” As with the vast majority of vehicles carrying rebuilt titles, the purchase price of the car will likely be substantially less than the purchase of the same make and model with a clean title. Despite getting a great deal, buyers should keep in mind that the rebuilt brand will stay with the car forever, so a similar discount will apply if the car is later resold.

Have a mechanic do a full inspection before committing to a purchase of a vehicle with a rebuilt title. While you may trust the seller, you can get get a full picture of the vehicle’s past with the purchase of a title search from the National Motor Vehicle Title Information System, Carfax or Autocheck. The information contained in these reports can help the mechanic doing the inspection to focus on areas where damage was reported to ensure that any necessary repairs have been done properly and that the car is safe to drive. This inspection can also determine whether the vehicle may require additional work, which can help to define whether buying the car carries the risk of expensive repairs or is safe to buy.