If you’re browsing online for used cars, you might come across one that’s going for a really low price. The car looks perfect in all the photos, and it only has a few thousand miles. So, what’s the catch?
When you look closer, you might notice that it’s listed as a rebuilt or salvage title car.
Vehicles with rebuilt or salvage titles initially cost much less than vehicles with clean titles, but it’s essential to understand all the risks associated with them before buying one.
Salvage Title Car vs. Rebuilt Title Car
A car can’t have a rebuilt title without having had a salvage title first, so they work somewhat hand-in-hand with one another. Here’s a closer look at what it means for a car to have a rebuilt or salvage title.
What Is a Salvage Title?
A car with a salvage title has been so severely damaged that it costs more to repair than what it’s actually worth. Essentially, it’s been declared a “total loss” by the insurance company.
A car that has been given a salvage title hasn’t always been in an accident. Cars can be salvaged if they have been in a flood, fire, or even stolen. However, salvage title laws vary from state to state. For example, in some states, a car that’s stolen and recovered could still be given a salvage title if the owner has been compensated for the car.
Regardless of how a car earned its salvage title, the conclusion is the same: salvaged cars aren’t safe for use on the road.
“They tend to be really unsafe. A lot of times the airbags have been inflated and may have not been replaced because it’s expensive to replace airbags,” says Rosemary Shahan, the founder and president of Consumers for Auto Reliability and Safety, a nonprofit advocacy group.
What Is a Rebuilt Title?
A salvaged vehicle can only get a rebuilt title if it’s been repaired and inspected by the state agency that issues titles. It varies from state to state what is required for a car to get a rebuilt title.
If the repairs meet the state’s standards, the title is changed from “salvage” to “rebuilt.” That means the car has gone through the repair shop and is now fixed.
But a rebuilt car isn’t necessarily any safer than a salvaged car, according to Shahan. “It just means that the state allows them to indicate that somebody rebuilt this, but there’s not a lot of standards for how well they rebuilt it or if it’s really an adequate repair,” says Shahan.
Why You Should Almost Never Buy a Salvage or Rebuilt Title Car
While a salvage or rebuilt title doesn’t necessarily mean the car is a death trap, the bad usually outweighs the good.
It may be tempting to buy a car with a rebuilt title because of its low price point, but what’s tricky is you don’t always know the extent of the damage that gave it a salvage title to begin with.
“It’s very hard to determine if a car is back to pre-accident condition,” says Jack Gillis, executive director of the Consumer Federation of America. “I recommend just staying away from those types of vehicles.”
Sometimes a rebuilt car can look shiny and new on the outside, but still have some serious internal problems. Flood damage is a prime example of this. Cars that have been damaged in a flood are especially dangerous to drive because it can take months or even years before the water corrodes the electric and mechanical systems. You should always ask an experienced mechanic to inspect a rebuilt car before deciding to make the purchase, but even then, it’s a risky move.
“If a vehicle was in a flood, you can’t fix it. It’s not rebuildable. If it was wrecked so badly that it was salvaged, chances are the frame or unit body was compromised,” says Shahan. “So if you’re in a subsequent collision, it’s not going to give you anywhere near the same protection that you would’ve gotten if it was an undamaged car.”
Getting insurance for a rebuilt car is another factor to consider. Many insurance companies won’t offer full coverage for a car with a rebuilt title.
As for salvage titles, the pool of ideal buyers is even smaller. You’ll almost never come across a vehicle with a salvage title at a big car dealership. More often than not, salvaged cars are sitting in junkyards and are bought and sold in the private market. Buying a car with a salvage title really only makes sense if you’re an experienced mechanic who’s willing to take on an intense hands-on project. The famous expert mechanic Jesse James from “Monster Garage” may come to mind. Still, many people buy up old cars, fix them, and then sell them for a decent profit — but if you’re the average car buyer, it’s likely not worth the gamble.
But most people don’t want a car that’s a fixer-upper, says Shahan, who suggests sticking with clean titles that you don’t have to worry about. A car with a clean title might be more expensive, but the peace of mind that comes with it could be worth the higher price tag.
“It’s just too high a risk,” says Gillis.