Home » Articles » Titles » Rebuilt Salvage Titles: Inspection & Insurance
If you own a vehicle with a salvage title, you may be wondering what the process of repairing and inspecting it involves. It’s important to also consider insurance implications when dealing with a repaired salvage vehicle. After repair, the vehicle will be issued a rebuilt title. In this article, we’ll go over the details of the inspection process for a salvage vehicle, and how obtaining a rebuilt title can affect insurance coverage and the vehicle’s resale value.
Before you take your repaired salvage vehicle for the official state inspection, it is a good idea to have it checked by a private mechanic. This pre-inspection will help ensure that the vehicle is properly repaired and ready to pass the official inspection. If your vehicle does not pass the salvage inspection by the state, you may be required to undergo a more thorough inspection before being granted a passing status. Additionally, applicants often have to wait 30-60 days for a second inspection. To avoid this, it’s important to ensure that all repairs identified in the salvage claim have been completed to the required standard set by the state.
Every state has its own salvage inspection process. Before going to your salvage inspection, it’s a good idea to familiarize yourself with the state requirements for salvage to rebuilt titles. A major aspect of all salvage inspections is the ability to produce receipts for all parts repaired. For example, if the salvage claim required you to fix the fender, you’ll need to provide a receipt for this part to show where it came from and to prove it came from an approved vehicle. The inspector will cross-reference the newly replaced parts with their insurance database to confirm the repairs were made accurately and using approved parts. Repairs that are not visible may indicate prior flood damage, or a recovered theft, which will make the inspection more complicated. Once you’ve passed the inspection, the DMV will issue you a rebuilt title.
Even though the car is running properly and safe to operate, some insurance companies will not insure vehicles that have rebuilt titles. And if they do, the coverage is very minimal and limited. If you’re looking to insure a vehicle with a rebuilt title, you may have to pay a higher rate or settle for less liability coverage. So if the vehicle is subsequently damaged, it may be challenging to recover any repairs.
This insurance consideration alone hurts the resale value of rebuilt vehicles, but additionally, many lenders will not finance a vehicle with a prior salvage history or rebuilt title. So if you have a later-model vehicle with a rebuilt title that you’re looking to sell, the new buyer may have severe limitations on financial assistance.
In summary, it is possible to convert a salvage title to a rebuilt title, but there are some limitations to consider. To ensure a smooth process, it is important to understand the original salvage claim, the inspection requirements in your state, any insurance restrictions, and any limitations on reselling the vehicle. While not all salvage vehicles will be eligible for a rebuilt title, familiarizing yourself with the process can help you navigate it more effectively.
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