VIN CHECK: Salvage Rebuilds

What is a salvage rebuild?

When a vehicle has been in an accident, vandalized, or otherwise damaged by weather such as flood or hail, and repairs will cost more than the vehicle is worth, the insurance company will deem it a total loss and take possession. Most state laws set the threshold on the amount of damage needed to declare a car totaled between 51%-80% of the vehicle’s actual cash value. Insurers will then sell these vehicles at auctions to salvage yards and rebuilders. The vehicle will be issued a salvage title to warn future buyers that an insurance company has determined it a total loss. In most states, the physical title is actually a different color than a “clean” title.

Once these vehicles are repaired, the owner can apply for a “rebuilt” title. Typically, a rebuilt title is only issued after the repaired vehicle is inspected by the state’s DMV or jurisdiction that issues titles. If the repairs are satisfactory, the title is changed from “salvage” to “rebuilt”. However, one must note, that in most cases, the inspector will visually inspect the vehicle and the repairs that were done, and will verify that basic systems like headlights, tail and brake lights, horn, windshield wipers and exhaust work properly, BUT they will rarely drive the vehicle or verify that safety systems, like airbags, are operational.

Why is it dangerous to buy a salvage rebuild?

Since a car with a “rebuilt” title has suffered enough damage to earn it a salvage title, even if it looks good from the outside and passes the required inspection, the severity of the damage can be destructive to a car’s structural integrity. Besides the obvious safety concerns with a vehicle that may not be structurally sound, here are a few other reasons to think twice before buying a salvage rebuild:

Good luck getting financing or insurance:

There are very few auto insurance companies that are willing to write collision and comprehensive policies on a rebuilt-title vehicle, as frankly, it is almost impossible to properly value the car with so many unknowns. The same goes for lenders, who secure your loan against the value of the vehicle.
Your vehicle will have minimal resale value

Some resources may say getting a 5-15% discount off a specific vehicle because of its inferior title, is a great deal as long as the vehicle is satisfactory. However, buyers must be aware that Edmunds and Kelley Blue Book won’t even attempt to give values to these vehicles because they may be closer to 50% or less than the exact year/make/model vehicle with a clean title.
Plan on keeping it forever

Even if you are willing to take a lower price in the event that you would like to sell your vehicle down the road, salvage rebuilds are extremely difficult to sell. Because they are so difficult to finance, and because of the inherent safety risks, the pool of potential buyers is quite small when a rebuilt salvage title is involved.
Fraud is commonplace

In fact, you may be driving a salvage or rebuilt title car already and not even know it. Title washing is a malicious criminal act that is a very prominent problem here in the U.S. Because state titling requirements vary, there is a loophole that these crooks use to sell a “clean title” vehicle, when in reality it is not. A vehicle with a salvage title in one state, can be driven to a state where an inspection is not required and a clean title will be issued. You can read more about title washing here

How do I protect myself from the risks involved?

Regardless of how well it was repaired, a vehicle with a salvage or rebuilt title will never be as good as one with a clean title. While shopping for your next used car, here are some important points to keep in mind to protect yourself from making a bad decision:

Ask to see the title document

If any of these words show up – totaled, reconditioned, salvaged, junked, rebuilt, or warranty returned – or if the color of the title is different from what you have seen before, you are probably looking at a salvage title. Your state or DMV website will have the specific markings to look for on the title document. Additionally, you should check the document closely to make sure it has not been physically altered in any way.
Get a professional inspection

Make sure you get a thorough mechanical inspection of all drivetrain and safety systems. Take it to your trusted mechanic, or better yet pay for an inspection from a qualified inspection company, if you are really close to finalizing the purchase. These companies perform a top to bottom inspection and provide you with a written report.
Run a VinAudit report

A quick check will give you detailed vehicle specifications, current and historical title records, and report to you any issues across 60+ potential title brands, including the date and entity reporting. This information is provided by the National Motor Vehicle Title Information System (NMVTIS) which contains records of total-loss reported by insurance companies as well as records of salvage reported by junk and salvage yards. Other resources may suggest to pay up to 4x as much for a Carfax report, but you must be aware that those reports do not include this crucial data from NMVTIS.
Check with your insurance company

Verify that you are able to attain the policy you desire since most insurers stay away from salvage vehicles. If they are willing to insure the vehicle, get a detailed quote, as the premiums on these policies can add up to be much greater than what you may have saved on the purchase of the vehicle.

VIN CHECK: Salvage Rebuilds

What is a salvage rebuild?

Why is it dangerous to buy a salvage rebuild?

Good luck getting financing or insurance:

Your vehicle will have minimal resale value

Plan on keeping it forever

Fraud is commonplace

How do I protect myself from the risks involved?

Ask to see the title document

Get a professional inspection

Run a VinAudit report

Check with your insurance company

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