It’s common knowledge for anyone buying cars to check up on the vehicle history beforehand. However, those that glance over vehicle history in favor of scoring a cheap and fast deal can be burnt with a potential lemon soon after. It’s always worth the trouble to check the MOT history prior.
That said, if you’re one of those people that look for the cheapest running car available of a particular model, then you might be familiar with the term ‘rebuilt title’. In fact, if you’re one to browse YouTube for car videos, then you’ll see people buying the cheapest particular model of a car in the country, with one caveat – it has a rebuilt title.
Some people would immediately cringe and back away at the mere thought of a car with a rebuilt title. However, if you understand the idea of a rebuilt title and what to look out for, it might be a real bargain that others avoid. People that are mechanically-apt might be inclined to buy a rebuilt vehicle too.
- What is a Rebuilt Title?
- What Makes a Car Salvage?
- Salvage Cars in the US
- Should I Buy a Rebuilt Title Car?
- Reasons You Should
- Reasons You Shouldn’t
What is a Rebuilt Title?
To put it simply, a rebuilt title is given to a car that has previously been issued a salvage title. As the name states overtly, it’s a car that has previously been involved in an accident and then is repaired afterward. Of course, it’s not quite so simple, as your car needs to be repaired to a roadworthy standard.
Typically, rebuilt title cars exist because of someone else buying a salvage title car. Even though the insurance company owns the salvage car after compensating the owner. Normally, the insurance company wants nothing to do with a salvage title and will offload it at an auction yard after reparations to the owner.
Therefore, this third party then goes to the auction yard and purchases the car with a salvage title. To be fair, only workshops or body shops will actively seek out a salvage title car. They proceed to perform the appropriate repairs and corrections needed to get this salvage car right again.
After hours of hard work, they finish up on the repairs necessary. Finally, they pay for an inspection garage to give the salvage title car a reclassification. If everything goes smoothly, the inspection will reclassify and update the car to a rebuilt title. This car can now be insured and registered as a roadworthy vehicle.
A small caveat though, while insurers will often provide liability coverage for a rebuilt title car, few will sell full insurance coverage for this rebuilt title car. This is because it’s difficult for people to fully assess the extent of damage in a rebuilt title car. Fewer insurers offer coverage for rebuilt cars too.
It’s also worth noting that rebuilt title laws aren’t ubiquitous across the world. Some countries might not necessitate labeling a rebuilt salvage car with a rebuilt title. This makes it easier for the unscrupulous to alter the history of a vehicle and remove the salvage title from the vehicle. It’s prudent to check the rebuilt laws locally and exercise caution with cars that potentially have ‘washed’ titles.
Salvage Title in the US
It’s worth noting that while there exists a categorization system in the UK, it’s a much different story in the US. A salvage car is a salvage car, regardless of the type of damage it has had. Basically, if the insurance determines it’s a total loss, the car becomes a salvage in the US without further discussion.
This makes it more ambiguous as to what type of damage the car has had. Therefore, the salvage car you’re looking at must come with a detailed history telling you what happened. A car can be salvage in similar ways to the UK, such as being stolen and recovered, being involved in a natural disaster, or due to an accident.
Different states have varying thresholds as to when to determine a car as salvage. This value is typically between 70-90% of the vehicle’s market value. An abandoned vehicle that’s worth little can also be considered a salvage car.
Intriguingly, there’s a different nomenclature for cars that are determined to be too far gone. These cars are considered junk, akin to Cat A and B in the UK. Basically, they’ve had severe damage to critical component(s) and it’s assessed as too far gone to be worth repairing.
However, unlike the UK, you can part out a junk title car, as long as the part remains usable. You can even re-register a junk car that has been repaired to roadworthy condition. However, these cars will be registered with a new VIN and it’s considered as a self-assembled car. It’s a long and involved process.
Rebuilt Title in the US
Once you repair a salvage car back to roadworthy condition and get it inspected by the DMV, it will be given a rebuilt title. These cars are typically valued at 60-70% the amount of a similar car with a clean title.
With that said, US laws differ state-to-state. Therefore, before you go out and buy a salvage or rebuilt car, it’s best that you research the laws that apply to your state. In some cases, the sellers don’t need to disclose much information regarding the car at all.
What Makes a Car Salvagein the UK?
A salvage title is another denomination granted to a vehicle by the insurance company. A vehicle is deemed a salvage if it has been in an accident severe enough that the damage has incurred sufficient repair costs to exceed the value determined by the insurance company. This value is normally within a range of value relative to the cost of the vehicle (approximately 75 to 90 percent)
Of course, an accident doesn’t necessarily constitute being involved in a physical crash. Various types of damage or occurrence can write off a car, whether if a human is involved or not. This includes vandalism to the vehicle, fire damage, flood, and theft.
Once the insurer pays off the owner and takes ownership of the vehicle, it gives the vehicle a category that better defines the extent of damage, ranging from Cat A, B, S, and N in the UK as an example, other rules will be found in the USA, etc. These denote different types of vehicle damage and roughly puts the salvage car from a range of repairable to literal scrap.
Category A: Scrap
First, we have Category A write-offs. These are vehicles that have suffered extensive and critical structural damage. Cat A cars are fundamentally irreparable and repair attempts should never be attempted on one. Even if comprehensive repair work were to be done, a Cat A car is simply unsafe to drive on the road. This may also result due to serious burn or flood damage.
Because the chassis of a Cat A car is severely damaged, the best way to deal with it is to scrap the car. This is typically what insurers end up doing anyway. The car must be scrapped ethically and completely with a certificate given after the process. No parts can be retained upon scrapping the car, because even the parts may not be structurally sound.
Category B: Break
Category B write-offs are similar to Cat A in that severe damage has been inflicted upon the vehicle. However, Cat A and B are different in that the remains of a Cat B car can be used again. This means that you can remove the engine, transmission and various other removable parts that can be sold as used parts.
However, the chassis and bodyshell must be scrapped once again. This makes Cat B cars the ideal choice for people seeking a parts car to extract difficult to find parts for, and in most cases, Cat B cars pay for themselves in just the parts alone. Although you’ll have to store the car and remove the parts needed yourself. Afterward, you have to scrap the unusable bits yourself.
Category S: Structurally Damaged but Repairable
Category S write-offs are involved with damage to structural parts of the vehicle (chassis, crumple zones, crash beams). However, the damages are not too extensive, and the car can be worked on to put it back o the road again safely.
Of course, you need a workshop that’s capable of properly undertaking the repairs, and as such incorporating crumple zones and manufacturer safety standards back onto the vehicle again. Afterward, an inspection must be undertaken by a field-accredited engineer and if the vehicle passes, they will re-register and thus re-label the vehicle for road use.
The original registration number can be retained for a rebuilt Cat S vehicle as well. However, there are specific requirements for this. You have to prove that you’ve used the original unmodified chassis or bodyshell or a new chassis or bodyshell with identical specifications to the original.
2 major assemblies must be retained from the original vehicle too, such as suspension, steering assembly, axles, transmission, and engine. Otherwise, the car must pass the relevant type approval test. It will be given a new registration plate with a ‘Q’ prefix afterward.
Category N: Non-Structurally Damaged and Repairable
This is one of the least egregious write-offs you can find. These are vehicles that haven’t suffered from damages inflicted to the components contributing to structural integrity. These days, body shell damage and roof panels are considered non-structural. Cat N cars can be repaired and put back towards road use without much safety concerns.
Regardless, you have to treat a Cat N car with care, especially if it has seemingly no damage. Typically cars that end up with a Cat N write-off might not have surface-level damage to assess from. This means that the car might have a blown engine and transmission. It can also be a flood car in need of a general electrical overhaul.
These cars are attractive to repair shops because Cat N does not require inspection performed by an engineer to be re-registered and returned to roadworthy condition. However, the repair bills will be costly, to say the least. Expect to find luxury cars with blown engines or electronics failure to end up here.
In 2017, the Association of British Insurers has renamed the C and D categories into S and N respectively. The definitions have only been tweaked slightly, and primarily to better define the write-off condition with safety in mind. Back then, these were defined by the cost of repairs. Again in the USA and other countries there will a localized system.
Should I Buy a Rebuilt Title Car?
Here’s the million-dollar question, should you buy a car that has a rebuilt title? The prospects of a car that has been rebuilt are undoubtedly tempting to a keen car buyer. A lot of money can be saved as rebuilt cars should be asking for way less money than a car with a normal title. However, before you get overly enthusiastic, always ask for a thorough history of a rebuilt car.
First, you should know the category of write-off the car has had. The category of write-offs a rebuilt car used to hold is obviously important to a car buyer. You should never see Cat A or Cat B cars on a used car lot being sold as rebuilt. These are considered as ‘actual loss’. However, with ‘constructive loss’ Cat S and Cat N cars, you should still proceed with caution, even if the repair work looks pristine.
This is where the history of the parts replaced will be very helpful. You must know the exact parts that are replaced in the repairs, and identify what has not been worked on that should have been given attention. In fact, with a bit of knowledge of the history of the vehicle, you can better acknowledge the quality of repairs carried out.
It’s definitely worth paying for an inspection carried out by a mechanic you trust for a rebuilt car you’re interested in. The last thing you want is for it to be a rushed repair work conducted just to put the car back on the road. Ask who managed the entire process of the vehicle between it being a salvage to being redeclared as a roadworthy rebuilt.
This applies especially to cars that were Category S. These will often represent a better value than comparable vehicles, but you should get the car inspected by an independent accredited engineer. Along with a workshop inspection, of course. These can help you avert the real lemons, while additional inspection can reveal flaws previously undisclosed from the seller.
Also, you should contact your insurance provider and ask whether if they will be willing to insure the rebuilt vehicle at all. Some insurance service purveyors won’t even touch rebuilt vehicles. Those that actually insure rebuilt vehicles often demand a premium without providing the full coverage. Therefore, do the calculations and ensure that cost savings from buying the vehicle isn’t offset by the heightened insurance premium.
Regardless, there are some write-offs you should be especially wary of. Remember, Cat N write-offs don’t require the owners to get it inspected or even re-registered by the DVLA. These cars have had catastrophic mechanical or electrical failures that made it a write-off. Thorough repair history is pivotal in determining the vehicle’s worth.
Flood cars tend to be a major gamble in most cases. These cars can be either Cat A, B, or N. Obviously, A or B are cars that are nearly submerged entirely, or had experienced saltwater or contaminated water ingress. Cat N flood cars are in the grey-zone, as these cars are technically repairable, but can be very erratic.
Before buying a flood car, you should inquire for more information about the damage that the car was involved in. For Cat N cars, this can be driving too quickly through standing water, causing water to flood the intake and hydrolock the engine. In some cases, this may result in transmission contamination too.
Checking the parts list should give you an idea of the failure case. Get an inspection done by a trustworthy technician. Make sure that the underbody isn’t rusting away. A flood-damaged car might have mud or gravel stuck in various areas, so ensure that the underbody is thoroughly cleaned. This indicates that the car might have been repaired properly.
An OBD2 scanner will also reveal if there are sensors that have failed due to water damage but haven’t been replaced. Because most car ECUs nowadays are located in the engine bay, check if water has entered the ECU. These might not cause immediate ECU failure but will result in deposits and corrosion.
The main issue with buying flood-damaged cars is that it tends to be plagued with electrical problems. These problems might not appear when you buy the car, or even when you drive it. Everything might be seemingly fine until the water damage works its way through the electronics and your flood car experiences odd electrical woes.
While explicit electronic problems can be relatively straightforward to diagnose or fix, what’s difficult is isolating problems caused by hidden water damage. This can be corrosion within ECU contacts that haven’t been cleaned off. Moisture within ECU will eventually lead to damage in the minuscule IC components that will cause ECU failure down the line.
If it’s your first time dealing with salvage or rebuilt vehicles, then it’s best to avoid flood cars. Flood cars are generally more trouble than it’s worth. A detailed vehicle history record should reveal any past with flooding. Keep in mind that some places require the seller to clearly state that the car had been involved in a flood before, but in most cases, it’s only reported as salvage.
Some cars might have been involved in a previous manufacturer buyback program. These are lemon cars that have had a multitude of critical safety, mechanical or electrical defects that are widespread across all vehicles of the same model. Eventually, the manufacturer has to agree to perform the repairs and in some cases recompense the owners. Sometimes the manufacturer purchases the car back from the owner.
These cars can be considered rebuilt cars, and they are generally sold at dealerships as pre-owned cars. As far as rebuilt cars go, these can be a rather safe gamble. Of course, you should still ask for the history of the vehicle and ask what parts are changed. Back this up with information given by ownership forums and verify that everything that needs to be fixed is fixed.
Although it’s worth noting that lemon laws have not been defined explicitly in the UK just yet. This means that technically dealers are not required to reveal the history of a lemon car, nor state register it as a rebuilt car. Research about the car you’re buying, understand the common problems, and check whether if the repairs needed are carried out by the dealership.
Reasons You Should Buy a Rebuilt Car
If you can identify the history of a rebuilt vehicle and understand what you’re dealing with, then rebuilt cars might just be the deal of the century. Of course, you may be left sour on your purchase, but at the same time, rebuilt cars cost way less than their peers. You should weigh in the history of the vehicle and whether if it’s worth the money being asked.
In general, rebuilt vehicles are 20 to 40% less than a similar model with a clean title. You can potentially buy a much better-equipped car or low mileage model for the same amount of money for a poor example of an identical model with a clean title. The lower asking price makes rebuilt cars attractive for keen consumers.
Besides the overt advantage of being more affordable than comparable models, rebuilt cars generally have major work performed recently. Whether if it’s new paint, new transmission, and engine, or even a complete electrical overhaul. And most rebuilt cars go through rigorous safety inspections before being re-registered, so they should be trouble-free.
This means that if you shop carefully, you can end up buying a well-equipped car that has had many parts changed on it. All for a price that’s less than what a similar model would demand. As long as the work carried out is done properly, of course.
Reasons You Should Avoid Buy a Rebuilt Car
Certainly, there are disadvantages and concerns that every rebuilt car faces. The lower resell value is a double-edged sword. The rebuilt title stays with the car indefinitely. This means that if you have to sell your car with a rebuilt title, you will take a penalty just because of the vehicle history.
Besides that, there’s also the matter of getting a rebuilt car insured. Because of the implications that the car may have been involved in a severe accident, fewer insurers will provide insurance to an ex-salvage vehicle. Most insurers only provide liability insurance for a rebuilt car. Moreover, you might pay for a higher insurance premium. And the payout will be less simply due to the lower vehicle value.
This is because it’s difficult for insurers to fully assess the damage the vehicle has had and make a guarantee on the repairs conducted on the vehicle. This means that insurers think that rebuilt vehicles are at greater risk should they be involved in a major accident.
Finally, there’s the simple matter of the fact that the car has had major repair work performed by a third-party before making it to the lot. While state inspections tell you that the car is technically roadworthy, that’s not a definite guarantee that you won’t run into problems driving it back home. Or even a few hundred miles down the line.
There’s also the problem that lenders and financial institutes might be less willing to finance a rebuilt vehicle. This is due to the lower vehicle value when compared to other similar vehicles. That translates to a lower profit over time.
Facts about Salvage and Rebuilt Title Vehicles:
- Salvage and rebuilt title vehicles are cars that have been repurchased and repaired after being declared a total loss by the insurance company.
- Salvage title is given when the vehicle’s repair costs exceed its market value and the vehicle is considered totaled.
- Rebuilt title is given when a car with a salvage title has been repaired and is deemed safe to drive after passing a series of tests.
- The vehicle’s title is changed from clean to salvage or junk by a state motor vehicle agency if repair costs are between 70%-90% of the car’s value.
- A vehicle with a rebuilt title may have a lower market value by 20% to 40% compared to similar models with clean titles.
- There could be potential safety risks and difficulties getting insurance coverage for a vehicle with a rebuilt or salvage title.
- Purchasing a car with a rebuilt title can lead to more costs in the long term if the repairs were not done correctly.
- A vehicle with a salvage or rebuilt title may be harder to sell than one with a clean title due to potential buyer wariness.
- It’s important to thoroughly examine the vehicle and have a professional mechanic check the engine before buying a car with a rebuilt title.
- Salvage title insurance may be hard to find while rebuilt title insurance may only offer liability coverage, and collision and comprehensive coverage may not be available.
All in all, if you’re experienced or mechanically-inclined, then buying a rebuilt car might not be that poor a decision. This is especially true if the rebuilt car comes with a detailed repair history with the receipts and information on the workshop where the work had been carried out.
As long as you understand what to avoid and look out for, you can minimize the odds that you end up with a lemon rebuilt car. This makes it less of a gamble, and more of being judicious in your buying decisions. You might be selling it for a lower price when the time comes, but you’re also buying it for a lower price.