Salvage vs. Rebuilt Title: What Are the Differences?

If you’ve been researching the difference between a rebuilt title vs. salvage title, you’ve come to the right place. In a nutshell, they denote damaged vehicles deemed totaled by auto insurance companies. The key difference is the extent of the damage and the roadworthiness of the two.

While buying a car with a rebuilt or salvage title could be a great deal in terms of the price, there are implications to consider. Read on to explore the pros and cons of buying salvage vs. rebuilt vehicles, ways these titles affect the car’s value, and more.  

Clean vs. Rebuilt vs. Salvage Title Comparison

Understanding the differences between clean, salvage, and rebuilt titles can help you avoid unexpected challenges down the line. While a clean title is absolutely safe, rebuilt and salvaged vehicles could be more challenging to secure insurance for. Besides, they pose greater safety risks and increase the chance of fraud during negotiations.  

When choosing a car to invest in, learn what each title means. Here’s a quick breakdown to guide you:

• Clean title: This one denotes a new automobile or a used one that’s never been written off as a total loss by an insurance provider. 
• Salvage title: This title refers to vehicles that the insurance companies have written off as total loss due to the estimated costs of repairs surpassing the car’s actual market value. 
• Rebuilt title: A car with a rebuilt title was once a salvage title vehicle that has since been restored to a roadworthy condition. After professional inspection and repairs, it’s considered safe and legal to drive. 

What Is a Salvage Title?

For a car with a salvage title, the cost of repairs outweighs its pre-crash value. Below are the chief reasons a vehicle gets a salvage title:

• A car wreck
• Weather damage, for example, fire or hail damage.
• Odometer tampering

The threshold for a total loss varies per jurisdiction. For example, in Virginia, every owner of a car that sustains damage with the appraised repair cost exceeding 75% of the vehicle’s actual cash value (ACV) must apply for a salvage title. The situation is quite different in Texas and Colorado, where the total loss threshold for a car is 100%. 

Before saying yes to a salvage vehicle, consider the risks that come with it. Treat the potential investment with caution to avoid a purchase that’s neither safe nor legal to drive. Mind that you’ll have to repair the vehicle and ensure it can pass inspection to be allowed to operate on the road again. Most insurance companies steer clean of salvage vehicles, so securing coverage might be challenging.

Despite apparent risks, some people consider getting a salvage car for a reason. Just because an insurance provider deems a car a total loss doesn’t mean it’s good for nothing. One of the major benefits is your negotiating power when settling the price for the vehicle, which allows you to get the best value for your money. 

If your budget is tight but you have the skills to get the car back to a road-safe condition, you can get a hidden gem for a fraction of the price. Besides, if you’re looking for affordable car parts, getting them from this type of vehicle might be the way to go. 

How Does Salvage Title Affect Car’s Value?

A salvage title devalues the car’s price. The original manufacturer’s suggested retail price (MSRP) for the 2017 Honda Civic LX Sedan 4D is $20,430, Kelley Blue Book estimates. However, this car’s current purchase price is much lower, averaging $12,808. 

For the calculation’s sake, let’s assume the ACV for this vehicle with a clean title is $13,000. In Virginia, a car acquires a salvage title if the repairs exceed 75% of its ACV. Hence, this car will get a salvage title if the estimated cost of repairing the damage surpasses the following:

$13,000 x 0,75 = $9,750. 

Depending on the scope of the damage, the car with a salvage title retains somewhere between 20% and 50% of its ACV. Based on the given example, if there’s minor — and easily repairable — damage, expect to pay half of the 2017 Holda’s ACV, i.e., $6,500. In parallel, severe deterioration reduces the price up to $2,600. 

While the difference between the value of a 2017 Honda Civic with a clean ($13,000) and salvage ($6,500-$2,600) title is appealing, it’s critical to estimate the cost of repairs to ensure the purchase is worth it 

Consider the differences between the ACV and the salvage title values for other popular car models. 

What Is a Rebuilt Title?

A rebuilt title means that the insurance company wrote off the vehicle as a total loss at some point. Yet, the automobile has since been repaired to a road-safe condition and passed the mandatory safety inspection. The major difference between salvage and rebuilt titles is that the latter holds fewer risks. 

Rebuilt vehicles are often estimated at 20-40% off the ACV. Besides, not all restored vehicles were severely damaged, making it possible to find a dream car with minor issues at a reasonable price. 

Still, the potential downsides of purchasing a restored vehicle should not be ignored. The first concern is safety. While the car must have been rigorously tested before being claimed road-safe, some issues might have gone unnoticed. 

Second, fraud risks are always there. With the seller seeking to negotiate the best price for them, chances are they won’t disclose every issue about the vehicle. Plus, you might have a hard time securing comprehensive or collision coverage. 

How Does Rebuilt Title Affect Car’s Value?

A rebuilt title also devalues a car. Yet, it does so to a lesser extent compared to a salvage status. On average, rebuilt vehicles are estimated at 60%-80% of the car’s ACV. Let’s use the same 2017 Honda Civic as a guinea pig for a handy comparison. 

With the initial ACV of $13,000, here’s what you get with a rebuild. 

• For the vehicle with minor cosmetic damage restored: 13,000 x 0.80 = $10,400.

• In case of greater damage: 13,000 x 0.60 = $7,800.

Consider the differences between the ACV and the rebuilt title values for other popular car models.

Benefits of Selling Salvage or Rebuilt Vehicle to JunkCarsUs

The perks of purchasing a car with a rebuilt or salvage title are undeniable, but so are the risks. It’s rarely possible to foresee how the previous damage would affect the car’s efficacy. It might not be long till your car starts to act up, with the estimated cost of repairs exceeding its current market value. All the worse, if you didn’t manage to secure proper insurance coverage. 

Here’s where selling your salvage or rebuilt vehicle to JunkCarsUs becomes a solution. JunkCarsUs offers competitive prices for junk cars to ensure you get the best value for your vehicle, regardless of its title. The process is straightforward: receive a free quote, schedule a pickup, and get paid on the spot. Plus, JunkCarsUs offers complimentary towing, further reducing your expenses. This makes it an ideal solution for those looking to sell an automobile with a salvage or rebuilt title with no hassle!