Insuring Salvaged and Rebuilt Titles
Insuring Salvaged and Rebuilt Titles
Author: Aaron Besson
With the rising cost of buying a car, it makes sense to consider all the options. Buying a salvaged or rebuilt title car can be good move, but you should know the ins and outs before taking the step.
Differences Between Salvage and Rebuilt Titles
The difference between salvage and rebuilt title is simple but large. A salvage title indicates the totaled status of the vehicle.
If the damage to the car is to the point where it would cost more to fix than what it’s worth, your insurance company will deem it a total loss. This usually happens if the damage to the car is between 50 and 80 percent of the actual cash value of the vehicle based on it’s current condition. The insurer will take the car and, after you receive payment, sell it to a salvage yard or possibly have it rebuilt. Either way, it will get registered as “salvaged”. This is so future buyers know that the car’s damage history.
Damaged but repaired cars, on the other hand, can get a rebuilt title. Rebuilt titled cars must go through an inspection as part of the titling process, but no inspection is foolproof. Get a second opinion on the car in order to make sure the car was properly rebuilt. A rebuilt car can be much cheaper than a regular used car, but they can also be harder to sell later.
Purchasing a Salvaged or Rebuilt Car
A salvaged car can be a great deal if you’re ready to invest some money into it. The repairs will probably be expensive and possibly push the cost beyond what a non-salvage vehicle would cost. All the same, with a careful eye you can come out ahead.
Research reputable salvage lots and private vendors when looking into a salvaged car. When you find one that has a car that has caught your eye, check for any extreme damage that’s close to not being repairable. If you find any, get an estimate before you buy. You wouldn’t be out of bounds having a trusted mechanic look at the car. Have them look at it carefully. Someone could repair it to the level needed for titling, and then remove the new parts afterward. The mechanic will be able to get you an estimate of what it’ll cost to get it road worthy.
Also keep in mind that legally driving a salvaged car on the road varies from state-to-state. Check with your state’s insurance commission to learn more.
When buying a rebuilt car, there are some key questions you should ask yourself:
o What happened to the car?
o What is the extent of the damage?
o Who repaired the car and are they certified?
o Are the repairs under warranty?
o Is the investment worth the risk?
While buying a salvaged car may seem high risk, it can be well worth it. Depending on if the car’s safety, the damage done to it, and the popularity of the make and model, you could save around 50 percent.
Insuring a Salvaged or Rebuilt Car
Checking with your insurer’s policies on salvaged and rebuilt cars is a good place to start. Some insurers cover them and other’s won’t. It’s a good idea to shop around and compare car insurance quotes to see the coverage and premiums available to you.
Purchasing liability or collision coverage shouldn’t be a problem. It can be difficult to gauge the worth of a rebuilt title, so getting full insurance coverage may be hard. Since every state except New Hampshire requires liability insurance, this could be a big problem. Again, it’s wise to check with your state’s insurance commission. On the upside, rebuilt cars are cheaper to insure than those with clean titles.
When getting the rebuilt car insured, you’ll need to first apply for a title change with your state’s Department of Motor Vehicles. You’ll need to provide your repair receipts, proof of inspection, and proof of ownership. Depending on the state you live in, they may require extra info.
As a closing reminder, it’s not the end of the world if your insurer will not cover the car. Take this opportunity to compare quotes from other carriers that do cover rebuilt titles.