TFL’s own in-house car flipper, Brendan, spends a lot of his time at dealer auctions, which are flooded with vehicles with salvage or rebuilt titles. Some look great, and some should be at a junkyard already, but all of them are for sale. In this video, Brendan and Kase break down the pros and cons of these suspect vehicles. Brendan also shares his experience buying a 2013 Mazda 3 hatchback with a rebuilt title for all of $700. Was it too good to be true? We’ll see.
Difference between a Salvage and Rebuilt Title
Put simply, a vehicle in this scenario starts with a salvage title, which usually means an insurance company has totaled the vehicle. They do this when they estimate that it would cost more to repair the vehicle than it’s worth, so they give the owner a check for the vehicle’s value and take the damaged car or truck away. The vehicle is then issued a salvage title and usually ends up at a dealer auction where buyers like Brendan are on the hunt for a deal.
But here’s the thing about vehicles in this world. Yes, they could’ve been in a horrific accident, or they could be a 10-year-old Toyota Tercel with superficial body damage that would’ve cost more to fix than it was worth. Or they could be a black 12-year-old Chevy Tahoe in perfect running condition with extensive hail damage to its hood, roof, and windshield that would cost so much to repair and repaint that the insurance company just said, “Screw it.”
If someone buys the salvage-titled vehicle, the new owner has the option to part out the vehicle or repair it and try to get a rebuilt title for the vehicle. To get a rebuilt title, the vehicle must pass a rigorous state inspection and be “road worthy.”
Shopping for a Salvage or Rebuilt Title Vehicle
Always pay for a vehicle history report. On it, you want to see the full title history of the vehicle including its current status as a salvage or rebuilt title. If anything looks fishy on the report, such as a missing registration history, note it as a red flag. For example, look for “title washing.” This is where an unscrupulous person takes a rebuilt title from one state and registers the vehicle in a different state but can get a clean title for the vehicle.
In general, avoid any vehicle with flood damage. Run away if you see sand or silt in the trunk or smell a musty, moldy odor in the cabin. A flood and the complicated, finicky electronics in today’s vehicles don’t play nice together. The car could run great one day then not the next due to some mysterious electrical short somewhere that you’ll never find.
On rebuilt titles, look for poor alignment on bodywork. This indicates a poor repair job that could be an indication of how poorly the rest of the repair jobs were completed. Look for uneven tire wear, which would indicate a structural problem with the frame or suspension that will likely cost more than the vehicle is worth to fix. That’s if it can be fixed at all.
Last, ask the seller for all the repair documentation. He or she will have to share these documents with the state inspector to pass inspection and get a rebuilt title. If the seller refuses to share them or claims he doesn’t have them, turn around a walk away from the deal.
Finding a Hidden Gem
With Brendan’s 2013 Mazda 3, getting the car for $700 felt like too good an opportunity to pass up. As you can see in the video, the interior is in excellent shape. Everything seems to work just fine. Ordinarily, a Mazda 3 of this vintage and shape with a clean title will go for $6,000-$7,000. Even with a rebuilt title, the hatchback could go for $3,000.
So why did Brendan get this for $700? Because it has TWO rebuilt titles. One from 2016 in California and one from 2019 here in Colorado. And the bodywork shows it. The panel gaps are pronounced and the paint job is not well done. But Brendan brings up a great point about shopping for rebuilt title vehicles. If the car was in great shape and running well after that first 2016 rebuild, that would be a great sign of the car’s problem-free reliability. It would’ve likely been worth that $3,000 price. So keep that in mind when shopping. A general rule of thumb when it comes to rebuilt titles, you can expect to get at least 20% off the vehicle’s blue book value (think, hail damage).
Final Advice
Keep in mind that your insurance company may refuse to insure a rebuilt title car. And insurance companies that will work with you may limit your coverage to liability only. If you get in an accident, you’re likely going to be out of a car with no money to show for it.
Last, don’t waste your time and money trying to fix it up. Limit your expense to regular maintenance like oil changes and the like, enough to keep it running reliably and safely, until it doesn’t.
Check out the video below to see Brendan and Kase’s take on the high-risk, sorta-worth-it world of salvage and rebuilt titles.
