To buy a car with a "rebuilt title" or not to buy a car with a "rebuilt title"...that is the question and the answer is not a simple yes or no. Purchasing a rebuild can be vexing because there are several things to keep in mind - like why the car was salvaged or rebuilt and whether or not a buyer knows all of the pitfalls that come with buying one. It can be a great buy but they can also be a nightmare; especially at trade in or resale time. For today's blog about salvage title vehicles, we'll use this 2014 Chevrolet Camaro our older son was seriously considering buying as an example.
So, what the heck is a car with a "rebuilt title" and what constitutes a "total loss" anyway? Also known as a "salvage title", "rebuilts" are cars repaired after being damaged such that an insurance company deemed them a total loss. Now, a car that's been "totaled" doesn't mean that it can't be repaired and resold although, on the surface, it sounds really fishy. Buyers are (somewhat) protected since if a car is totaled and fixed, it's title is branded as a "rebuilt".
Regarding a "total loss", that varies somewhat from state to state but here in Ohio, insurance companies use a total loss formula or what is referred to as "TLF". With "TLF", if the sum of the cost of the repairs of a damaged vehicle plus it's salvage value exceeds its actual cash value (ACV) or "book value", the vehicle is deemed a total loss. Other states use a percentage of the damaged vehicle's value relative to the cost to repair it to determine if it's a total loss or not. For this '14 Camaro with just 12,000 miles on the clock to have been deemed a total loss here in Ohio, it must have been seriously messed up. Thing is, it wasn't. More on that in a second or two.
Not all cars with "rebuilt" titles are created equal. Some cars that are rebuilt shouldn't have been because they were too badly damaged and their future crash worthiness could be compromised. While the body shop selling this car was quite forthcoming with information about the damage this car previously had, I had a hard time getting my head around buying a car that had been banged up so badly that it had been "totaled"; despite an asking price a good twenty five percent below market value. Also, this car allegedly had front end damage so bad that it warranted the car being totaled while at the same time the air bags didn't go off? Heh? Weird. Anyway, as you can kind of tell, the car looked perfect but I uncharacteristically hemmed and hawed and dragged my feet on helping my son make what would ultimately be his decision. Oh, and another thing that sorta haunted me about this car is that salvage title vehicles car will always be significantly worth less than a comparable car with a "clean" title.
While our son said he would keep the car for "ten years or more" to wring as much value out of it as possible, another concern I had was if he had to get rid of it while still owing on it, ditching a rear wheel drive sports car here in north east Ohio is tough enough let alone anything with a "rebuilt" title. However, taking everything into consideration, seeing how solid the car was, how much information we had on it, and my willing to take it off his hands should he want to part ways with it, I was ok with whatever decision he made. With that, he made up his mind to purchase it.
Well, snooze you lose. No sooner had he made up his mind to make the purchase when someone else thought it a good buy too and beat us to the punch.
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