What is Salvage title? Buyer Tips

What Does Rebuilt Title Means? Should You Buy a Car That Has a Salvage or Restored Title? Why or Why Not?

By Mike Richards Updated: 05/22/2019 Posted: 04/14/2017

The car market is tough. Particularly when you’re searching for a used car or interested in a hard-to-find vintage or collector’s item, the market can get competitive. If you’re lucky, a car might become available that has a restored title. But what does this mean, and should you invest in it? What does a salvage title mean, rebuilt title means? The answer is as unique as the car itself is.

What is a Restored (Salvage) Title Means?

When a car is severely damaged, an insurance company must assess whether it’s worth their time and money to restore the car. If they decide not to, the car will be declared a total loss. When that happens, the car is branded with a salvage title. That means that the car was totaled by an insurance company, and this branding typically remains with the car for the rest of its existence.

Salvage cars are less valuable than other used cars, since they are often extensively damaged. This damage is not always visible, and without a car history report, it’s impossible to assess whether the car is even safe to drive.

Some states allow owners of salvage cars to fix the car up, then seek a different title. A restored title indicates that the car has met state restoration laws, and can now be sold as a non-salvage vehicle. However, the car’s status as a restored title indicates that it was once a salvage vehicle. This raises important questions about the car’s history, and demands due diligence.

State Restored Title Laws

Every state establishes its own laws governing restored title vehicles. Thus the best source of information about what to expect from a restored title car is your state’s laws. A local dealer or other car-buying expert can help you determine precisely what’s required of a restored title car.

In general, cars with restored titles must pass rigorous inspections, in addition to showing that the owner has completed specific repairs. Consequently, cars with restored titles are typically safe to drive, and may even be in better internal condition than uncertified used cars.

Should You Buy the Car?

Is buying a car with a rebuilt title good idea? There’s no right or wrong answer to that question. The answer depends on your specific needs, budget, and other considerations. A restored title car may be a good bet if:

  • Your state title restoration laws offer some assurance that the title restoration process will render the car safe to drive.
  • The car has been restored in the state where you live, not some other state. Some unscrupulous dealers attempt to engage in title washing, an illegal process whereby they obscure a car’s history by registering it in a different state.
  • The seller is willing to answer specific, extensive questions about the car.
  • The car is being sold for less than market value. Even restored title cars are of a lower value than those that have not been restored, since a restored title means the car has a history as a salvage car.
  • You can afford to fix any cosmetic damage to the car without exceeding the actual sales value of the car.
  • You can afford to pay for the car in cash, and your insurer has indicated they are willing to insure the car.

A restored title car is probably not the right choice for you if:

  • You can’t afford to pay in cash.
  • You already have high insurance premiums, or you are unsure of whether your insurer will be able to insure the vehicle.
  • The car has extensive and expensive cosmetic damage.
  • The car has a history of being flooded.
  • The car is from another state, and/or you can’t get access to a full history report.
  • The dealer will not provide you with references, or has a bad reputation.
  • The car is being sold for more than market value, or it will demand more costly work than it is actually worth.
  • There is a used car that’s not been previously salvaged available for a similar price.
  • You can afford to pay a little more for a certified used car.

Pricing Considerations

Price is a major consideration when buying a vehicle at auction with a restored title. The primary reason to buy such a car is that it is cheaper than other cars on the market. If you are not saving significant cash by purchasing a restored title car, it is simply not worth the money. The only exception to this rule is when the car is a collector’s item or cannot be purchased on the open market.

So how much should you pay? A restored title car that is in perfect condition and requires no extra work should go for 5% or more below market value. As damage to and problems with the car increase, the price should decrease.

Knowing the Full History

Even when a car’s title has been fully restored, you need to know the car’s history before you agree to buy it. A vehicle history report tied to the car’s VIN offers assurances that the car is safe to drive, that the seller is not engaging in fraud, and that the car is the age the seller claims.

If a seller cannot provide a vehicle history report, or will not offer the car’s VIN, this is a bright, glaring red flag. No car is ever worth this uncertainty. Move on to a different car and a different seller.

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