Buying a Car with a Rebuilt Title

If you are thinking about buying a car with a rebuilt or salvage title, be sure you do your homework and are prepared. While some of these vehicles are perfectly good, others can have quite a sketchy history behind them — and that means they could be difficult to insure or even to finance. Before you purchase a salvaged or rebuilt car, make sure you consider all of these factors:

• The value will be affected: Now, for a consumer, this can be a plus. Most cars with rebuilt titles see their values drop by up to two-thirds. That's because, in all likelihood, the car has been through an accident or other extensive repairs, and is not as valuable as a like-new version of itself. Make sure you're purchasing a salvaged vehicle for the right price, and don't overpay for something that might have decreased significantly in value. A Blue Book evaluation can help a bit with the value, but you also might need to check on comparable vehicles and do your own market analysis.
• Consider insurance early: No matter where you live, you'll be responsible for obtaining insurance in some format for your new car. And if you have a vehicle with a rebuilt title, you could have some insurance issues ahead of you. If, for example, the car has some structural damage that could render it less safe, an insurance company is likely to take this into account. Your insurance costs are directly tied to your personal driving history as well as the make, model, age and possible condition of your vehicle. You might want to look into a special salvage title insurance policy, or other specialized programs. Remember that we can help you get an online auto insurance quote, so you can compare all your options.
• Know the vehicle's history: A car can get a salvage title for a variety of reasons. In some states, a stolen vehicle gets a salvage title designation, while in others salvage titles are restricted solely for total losses in accidents. The history of the car can directly affect your desire to own it, as well as its value. You might want to order a vehicle history report and also have an independent mechanic inspect the vehicle to determine its condition and value.
• Think about financing: If you need a loan to get a car, and if you are buying a salvaged vehicle, you will need to disclose this to your lender. Remember, technically the lender is the vehicle's owner (on the title) until you pay off the loan. The lender could require additional information about the car to make sure it's a worthwhile purchase.