When buying a used car, you may come across vehicles with a “rebuilt title.” This simply means the vehicle was once declared a total loss by an insurance company but has since been repaired and made roadworthy again. This label comes with a lot of baggage, making it harder to obtain insurance or get approved for a title loan later on. Explore what a rebuilt title entails and how it could impact your decision to apply for a title loan.
How Does a Vehicle Get a Rebuilt Title?
Here’s the four-step process:
- The car is totaled: Every state has rules about what constitutes a totaled vehicle. Texas sets the total loss threshold at 100%, meaning the title is marked as “totaled” when the repair cost surpasses 100% of the car’s actual cash value. The reasons for this can range from collision or fire damage to extensive flood or hail damage.
- The repair phase: Generally, totaled cars receive a “salvage” or “junk” title, indicating they’re unfit for the road. The majority of these cars are disassembled for parts. However, some cars escape the crusher, and with a bit of TLC, they can become roadworthy again.
- Inspection time: Most states require an inspection for repaired totaled vehicles before giving them a new lease on life with a rebuilt title.
- Issuing the new title: Once the car passes inspection, it gets a rebuilt title, allowing it to be legally driven again. However, this rebuilt status will stick with the car for the rest of its life.
Does a Rebuilt Title Affect Insurance?
Insurance companies view rebuilt titles with varying degrees of skepticism. Some might offer only liability coverage, while others may turn you away entirely. The premium might also be substantially higher, so consult your insurance agent before finalizing the used car purchase.
Rebuilt Title vs. Salvage Title
With a rebuilt title, your car is allowed back on the road. In contrast, a salvage title permanently sidelines your vehicle. Interestingly, rebuilt titles have different names based on the state, such as reconstructed, revived salvage, or restored salvage.
Should You Buy a Car with a Rebuilt Title?
Typically, the only reason to go for it is the lower price point. On the other hand, the list of drawbacks is quite long. First, the car has a lower value, so getting a title loan for the amount you want could be more difficult. Insurance is also challenging to obtain with a rebuilt title. Plus, the original warranty probably won’t cover the vehicle, leaving you exposed if significant issues arise.
Is a Rebuilt Title a Deal Breaker?
While the idea of a cheaper car is tempting, the cons of a rebuilt title often outweigh the pros. Unless you’re well-versed in car repairs and have thoroughly vetted the vehicle, it might be best to steer clear.
If you have a car with a clear title and need money fast, turn to VIP Title Loans. We offer the best title loans in Texas, with the lowest rates and flexible terms that our competitors just can’t match. To get started, call us at 817-265-2274, fill out our online application form, or visit one of our five convenient locations in the DFW Metroplex.