Purchasing a used car often saves you money as it avoids the initial depreciation. But what about cars with rebuilt or salvage titles? Find out what these titles mean and if the initial discount is worth it in the long run.
4 minutes
06.22.2023
If you are looking to purchase your first vehicle and are considering purchasing a used one to save money, you may notice the different types of titles associated with vehicles during your search. Rebuilt and salvage titles are common amongst the various options. Learn about them in more detail so you understand the potential risks associated with rebuilt and salvage titled cars.
A rebuilt title is given to a vehicle that has been extensively damaged and then repaired. Typically, a vehicle receives a rebuilt title when the cost of repairing it exceeds a certain percentage, often around 75% to 90% of its pre-damage value, or when an insurance company declares it a total loss. After repairs, it has been thoroughly inspected and deemed safe and driveable.
A salvage title is when a vehicle with significant damage, such as from a severe accident, flood, fire, or theft recovery, is written off by an insurance company. Salvage vehicles are typically sold to auto salvage yards, where they can be purchased by individuals or businesses interested in repairing and reselling the entire vehicle or for its parts. No inspection is done and the car is deemed undriveable.
In addition to rebuilt and salvage titles, there are other types of car titles that you may come across.
Cars with rebuilt titles are typically cheaper as they have a history of requiring repairs. While the repairs have been made and the vehicle has been deemed safe and driveable, there may be underlying issues lingering you may be unaware of.
If you are considering purchasing a car with a rebuilt title, make sure you obtain a detailed history of the vehicle, including the nature and extent of the damage. It's crucial to understand the specific reasons why the vehicle was declared salvaged and what repairs were made.
Find out if the rebuilt title vehicle has undergone a thorough inspection by a trusted authority or the Department of Motor Vehicles in your area. The inspection process is designed to ensure that the vehicle meets safety and roadworthiness standards after being rebuilt. You may also want to consider bringing the vehicle to your own trusted mechanic.
Vehicles with salvage titles are not legal to drive. The car has been deemed as a total loss, or “totaled.” However, if your car has had so much damage that it is deemed “totaled,” you can still make some money by selling the car for its scraps and parts.
Both a rebuilt and salvage title mean the car has experienced extensive damage. However, the main difference is that a car with a rebuilt title has been repaired enough to be able to drive, whereas a car with a salvage title is undrivable.
Summary of differences between a car with a rebuilt title and a car with a salvage title:
Vehicle status
Repair process
Inspection and certification
Perception and value
Insuring a salvage title vehicle can be challenging, and some insurance companies may provide limited coverage or higher premiums due to the perceived risks associated with these vehicles. Additionally, getting financing for a salvage title vehicle may be more difficult, and lenders may have specific requirements or charge higher interest rates.
While a car with a rebuilt title may save you money upfront, the cost of insurance and the hidden unforeseen problems may not be worth the risk and initial low sticker price.
Instead, opt for a FINN car subscription. Car subscriptions are a good alternative to buying a new car as it allows for an all-inclusive price, low-commitment, and delivery at your door. You also get a full history of your vehicle that will provide you with peace of mind knowing you are driving a safe vehicle.
When shopping for a used car, it is important to familiarize yourself with the various types of titles. A rebuilt title means the car has been damaged, but repaired and inspected. A salvage title means the car can be attempted to be repaired or sold for its parts. While these types of vehicles are cheaper upfront, the cost to finance, insure, and repair down the road may not make the purchase worth it.
Alternatively, opting for a FINN car subscription provides you with a complete car history. You have many options to choose from, and can switch vehicles when you need to. Browse the vehicles and look into how you can subscribe to a vehicle with FINN today.