Can I insure a car with a salvage title?


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UPDATED: 2021-01-21T19:12:46.879Z
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An illustration of a red car with a salvage title on a tow truck in a city.

You might be looking to save money when you are in the process of buying a vehicle. One of the ways you can do this is by purchasing a vehicle with a rebuilt car title, but there are certain risks associated with that.

The price tags on one of these cars may look appealing. However, you should take some time to do your research to learn more about how buying a car with a rebuilt title can affect you and your ability to find an insurance policy to cover you.

It’s important to understand what a rebuilt or salvage title means before purchasing the car. You cannot purchase car insurance for a car with a salvage title because the car was deemed a total loss and it’s not allowed to drive on public roads. However, if the vehicle is reconstructed and receives a rebuilt title, you may be able to legally drive it and get insurance for it.

Below are the topics that will be covered in this blog. Click below to jump to a certain topic of interest.

What does a rebuilt title mean?

When a car has a rebuilt title, it means that it was once issued a salvage title, but it has been repaired to a condition that is safe enough for the road. The meaning of the salvage title on a car is that it was once deemed not worth repairing. This could be a car that was considered “totaled” by an insurance company after an accident. The cost to repair the car likely exceeded the market value of the car itself.

A car with a salvage title is seen as unsafe and not in a position to be driven out on the road because of the damage it has. However, in many instances, cars with salvage titles can be repaired and resold to someone in the market like you. Some people are in the business of solely buying these cars incredibly cheap, fixing them up, and reselling them to make a profit.

These cars are sold in used dealers or sold directly to customers themselves. After many repairs and replacements, the once salvaged car is inspected and given the all-clear that it's in safe working condition. Once the car passes all the inspections that cars in these conditions require, it is given a rebuilt title (also called reconstructed title) and is legally able to be out on the road once more.

Keep in mind that laws and restrictions for rebuilt salvage vehicles can vary by state. Check your state's transportation website for details.

What are the pros of buying a car with a rebuilt title?

When you purchase a car with a reconstructed title you could save a lot of money, but it’s important that you know what you’re buying and what the challenges are that you may face.

The biggest advantage to purchasing a reconstructed car is that it is likely cheaper than a car that has never had a salvage or rebuilt title. Depending on the type of vehicle you purchase and the condition it is in, this could be a car that could last you a long time. Many are left in good condition (after going through a lot of replacements) and you could end up buying one that could have been replaced with great parts making the car overall a great purchase and a good deal.

However, sometimes reconstructed vehicles can have underlying issues sustained from the accident that are not detected right away. If you plan on buying a car with a rebuilt title, keep this in mind. A car with a rebuilt title is deemed safe at the time, but always be sure to fully inspect the car before purchasing and be aware that inspections may not catch everything.

While a reconstructed car may save you money on the purchase, it may cost you money later on if the car needs additional repairs.

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What are the cons of buying a car with a rebuilt title?

Although you may save money today by purchasing a vehicle with a rebuilt car title, you could end up losing a lot of money. It is important to remember that you are purchasing a car that was once referred to as “not worth repairing” because of the significant damage it sustained. There is a reason this salvage title was given and salvage title records remain with the car forever, making it difficult to sell the car in the future.

Although there have been repairments and replaced parts done to the vehicle, it can be difficult to tell what problems could arise in the future due to the damage that was once done to the car. It is easy to look at the exterior of the car and see all these great visible replacements that have been made, but what could be on the inside could tell a different story. Sometimes things can be overlooked and later on become a serious problem.

The next important thing to consider when buying this type of car is the fact that because the car is rebuilt you might have some trouble finding an insurance company to cover you. Insurance companies recognize the risks that are associated with covering a car like this and most tend to steer clear of even covering them at all. This is because they can be risky for the company to insure. If you were to get into an accident with the reconstructed vehicle, it could be difficult to identify whether the damage was caused in a recent accident or in a prior accident that caused the car to be totaled.

If you do in fact find an insurance company willing to cover your car, you might be surprised to find out that the policy does not cover what traditional car insurance covers. Some insurance companies might only cover you for liability and everything else would be your responsibility to repair if needed. Another possibility is that the insurance company would charge you a high premium for a policy on a reconstructed vehicle.

You might ask yourself, “what the point is in buying a car that saves you money if insurance companies are not willing to fully cover it?” You could lose more money if you were to ever be in an accident. Making what once was a good deal in price, a bad purchase in the end.

What you should know before buying a car with a rebuilt title

One of the most vital things you should do before you purchase a rebuilt titled car is to check the car's historyalong with other factors. Here is what you should check before buying a car with a rebuilt title:

  1. Car’s History: You should do your research on the car and what exactly happened to it. You should get all the information on the damage the car endured and the repairs it went through. Similar to any other car buying process, if you are buying a used or preowned car, you should ask for things like a CarFax. These types of reports allow you to get the most updated and factual information on the car itself and its whole history.
  2. Car Parts Used: One thing that could be overlooked when purchasing a rebuilt title is where the car was repaired and what parts the car was repaired or replaced with. You want to know all the information you could find about these types of cars. You would want to know if the car was replaced with parts from other salvaged cars or even used parts. Sometimes cars are replaced with aftermarket parts instead of certified factory ones. The parts may look great from a glance, but they might not fit 100% correctly and, after deeper inspection, you may see they do not sit right.
  3. Vehicle Inspection: After finding all of this information, you should get the vehicle inspected by someone whom you trust and/or a reputable company of which you may know. This ensures that you are getting the car inspected with a company that will tell you the truth and to help you determine if it is a purchase worth investing in. It is better to get all these facts right away before buying a car that could end up having more problems, leaving you without options if you choose to resell in the future.

All of these factors are incredibly important when considering purchasing a car with a rebuilt title that was once a salvage title. It is best to do all of the research and have all the information possible before deciding on buying any type of car. This is especially true when it comes to buying these types of cars. You might change your mind about purchasing a car with a rebuilt title when you dig deeper into the car's history. Or you might feel differently about the fact that the car was once repaired with not the best parts on the market.

Also, be sure to calculate costs that may arise in the future and to research the best insurance companies and their policies before finalizing a car purchase. One way to do this is by checking Clearsurance’s rankings page to find the coverage for you and get real insights from reading reviews from customers like you.


Image source: alazur/ shutterstock.com

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