Rebuilt Titles: Is the Price Worth It?

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Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - January 13, 2021

If you’re considering a used vehicle with a rebuilt title, there are some risks involved. While branded-title cars tend to be less expensive than vehicles with clean titles, they could cost you in the long run.

Rebuilt vs. Clean Title Used Vehicles

A car that doesn’t have a branded title is considered "clean.” All vehicles start off with a clean title off the manufacturer’s line. If the car is sold, driven, and something happens to deem the vehicle a total loss, such as heavy water damage or an accident leaving the car undrivable, then it’s branded as salvage. A salvaged vehicle can’t be driven or registered in anyone’s name.

However, salvaged cars can sometimes be repaired. If it’s rebuilt and passes inspection, the title can then be changed from salvage to rebuilt. So a vehicle with a rebuilt title goes through at least three title changes: clean, salvage, rebuilt. Vehicles with rebuilt titles are considered safe to drive, so you could purchase one of these cars and register it in your name.

Since they’ve had damage and then gone through extensive repairs, rebuilt vehicles are typically less expensive than their clean counterparts. Due to the lower price tag, rebuilt title cars can be tempting to borrowers looking for a good deal on their next purchase. A rebuilt vehicle can be 20% to 40% less expensive than its clean counterpart, but this varies depending on the car’s full history.

Is Buying a Rebuilt Vehicle a Good Idea?

Whether or not buying a rebuilt vehicle is a good idea can vary greatly depending on the car's history.

What caused damage that deemed it as salvage? Was the vehicle completely submerged in water? Was its value already low when an accident happened? These are things to consider before you move forward with a purchase.

It’s often recommended to avoid cars that were flooded and then rebuilt (sometimes branded with a flood title depending on the state), due to the fact that mechanical errors are very likely with these. While the car may be drivable after it’s rebuilt, you possibly risk having to deal with mold, mildew, and fried electrical components that can cause major, costly issues in the future. The low price of the purchase may not be worth it if you need to pay for high-cost repairs in the future.

Any vehicles with major frame damage are risky as well. Once the frame is damaged, it compromises the entire integrity of the car because everything is thrown out of alignment. It can be fixed, but it’s risky to take on a vehicle with damage that severe. Again, the cost of possible repairs in the future may not be worth the possible 20% to 40% in savings at the time of sale.

However, if a busted bumper was enough to total it, buying that rebuilt vehicle may be a good deal! It’s worth it, at the very least, to ask a lot of questions about the car’s history and look up a comprehensive vehicle history report before you hand over any cash.

Auto Loans for Rebuilt Vehicles

There is one big snag with financing rebuilt titles: lenders may not be willing to approve a loan for it. Many lenders don’t finance cars unless they have a clean title, and this includes bad credit auto lenders (subprime lenders), too.

Banks, credit unions, and subprime lenders typically prefer financing vehicles in good condition with a clean title. To a lender, approving a loan for a rebuilt car represents a risk. If the vehicle breaks down, there’s a higher likelihood of the borrower defaulting on the loan – who wants to keep paying on a car that doesn’t run anymore? Additionally, if the vehicle is repossessed and needs to be sold at auction to cover the loan balance, the auction proceeds may not be enough to pay the entire balance, leaving a deficiency balance.

If you want to finance a car with a rebuilt title, you may have to do some major legwork to find a lender that’s willing. Or, you may have to pay cash for it.

Unsure About Rebuilt Titles?

Since rebuilt cars carry risk, many borrowers steer clear of them. Most dealerships don’t even allow rebuilt vehicles on their lot! If you’re looking for a reliable car, consider financing with a dealership – especially if you have less than perfect credit. With a poor credit score, one of your priorities should be financing a vehicle that lasts.

Finding dealerships with bad credit lending resources doesn’t have to be difficult if you start right here, with us at CarsDirect. We’ve created a nationwide network of dealers that are signed up with subprime lenders that specialize in assisting borrowers with credit challenges. Begin right here, right now by completing our free auto loan request form. We’ll get right to work in looking for a dealership in your local area!


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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