Rebuilt title vs. salvage title: What’s the difference?

Q: Does a rebuilt title mean the car was totaled?

Usually, yes . A rebuilt title was first a salvage title, which meant the repairs exceeded the vehicle's value.

Q: Is it hard to get a rebuilt title?

It can be . The car will need to pass an inspection, and you will need to be certain there is no hidden damage you might have missed.

Is a rebuilt title the same as a salvage title?

There is a difference between a rebuilt title and a salvage title. One of the main differences is that a salvage-title car is generally not driveable, while a rebuilt-title vehicle is.

“A salvage title is issued when a vehicle is declared a total loss due to severe damage from accidents, floods, fires, or other incidents, often when repair costs exceed 70% to 75% of its value,” says Yiling Deng, associate professor of insurance and risk management at the University of Central Arkansas. “These vehicles are unfit for road use until repaired and inspected, and they cannot be legally driven, registered, or insured without meeting state requirements.”

Some people buy a salvage car or keep their totaled car to save money or because they have the skills to repair it. It’s not without risks, however, as you can encounter unforeseen issues down the road with any car that has sustained a significant accident, storm or flood damage.

“A rebuilt title is issued once a salvage-title vehicle has been repaired, inspected, and deemed roadworthy,” Deng says. “While now safe and operational, it retains a damaged history. Rebuilt-title vehicles can be legally driven, registered, and insured.”

Cars with rebuilt titles are insurable and driveable, but their value is much less than that of a car with a clean title and no accident history. While you can get insurance, you may not be able to get full coverage insurance.

Rebuilt title vs. salvage title

There are some major differences between rebuilt-title and salvage-title vehicles:

Rebuilt Title	Salvage Title
Issued once the vehicle is repaired and inspected	Issued while the car is damaged beyond its worth and in need of major repairs
Driveable	May not be driveable
Can be insured but may not be able to get full coverage	Usually can’t be insured until they are repaired and inspected
Worth less than cars with a clean title; you can get a good deal	Have a significantly lower value than clean- or even rebuilt-title cars

What does a rebuilt title mean?

A rebuilt title means what the name implies – that the car has been repaired and rebuilt and is now fully functional and ready to drive on the road. Once it has been inspected, you can find insurance and start driving.

What does salvage title mean?

A salvage title is issued when your car has been severely damaged or totaled, and the repairs exceed its worth. Until it’s repaired, you’ll be issued a salvage title. You generally can’t drive cars with a salvage title or get insurance for them. You can buy salvage-title cars at a good discount if you’re willing to pay for the repairs.

In some cases, a car may be totaled and still driveable, such as the case of a severely hail-damaged car. In this instance, you may be able to get insurance even with a salvage title,

How does a salvage or rebuilt title affect car insurance?

“Both titles significantly reduce a vehicle’s resale value compared to a clean title,” Deng says. “Insuring a salvage-title vehicle is difficult, as many insurers are reluctant to provide coverage due to the vehicle's history and potential liability. Even though it's [usually] easier to insure a rebuilt-title car compared to a salvage-title one, some insurers might charge higher rates or offer limited coverage because of its past.”

If you’ve repaired the salvage-title vehicle and need to get it inspected and insured, you may have to contact an insurance company first. It will depend on the state and the insurance company. Some require the insurance first, and some require the inspection first.

Shopping around is key to finding the best deal on insurance for a rebuilt-title car. The rates might not necessarily be higher, but you may not be able to find full coverage for this kind of vehicle. If you have a clean driving record, you’ll have an easier time.

How much does a rebuilt title affect value?

Cars with rebuilt titles are less expensive than cars with clean titles. A clean-title car has a better history than a car that was severely damaged in an accident, a storm, or a flood. Buyers are wary – as they should be – of vehicles that had major damage and repairs to the frame and mechanical systems.

If you’re looking to buy a rebuilt-title car, you can save significantly compared to buying a car with a clean title. It’s a good idea, however, to do your due diligence and ask for the full history of the vehicle and its repairs. Purchase the car from a reputable dealer who is forthcoming about the vehicle's condition and everything that’s been done to it. Even if you have the whole history, buying a rebuilt car is considered somewhat risky because accidents, storm damage and other major types of damage that require significant repairs can cause unseen issues.

How much does a salvage title reduce the value of a car?

A salvage title may reduce the car’s value by 20% to 40%, sometimes more. Without repairs, the car may be uninsurable and undrivable. You’ll have to pay to get it back on the road again. Once the car has sustained significant damage, many of the major systems are affected and even with repair, there could be unforeseen issues down the road.

Buying a salvage-title car can save you money upfront, but you’ll need to make a major financial investment to get it back on the road.