The used car market has been going through an interesting phase over the last one year. Used vehicle prices begin to rise in early 2022, reaching nearly a 43% premium over pre-pandemic levelsAccording to a report by JP Morgan. Although Prices to (slowly) start to decline in the last quarter of 2022 As the supply chain eased and new car production increased, they are still historically high,
This gives you all the options to consider when it comes to reducing the sticker price. But one of those probably isn’t worth the risk – so it’s best to avoid buying a reconditioned titled car here.
What is a recreated title?
A reconstruction title is different from, but related to, a salvage title. Defense title awarded a vehicle that has experienced “significant damage” in the past, according to Edmonds. A rebuilt title, on the other hand, refers to a car that once had a salvage title, but has been fixed by a mechanic and deemed safe to operate by the issuing state. (Every state has a different definition of what they consider a rebuilt or salvage title, so check your state’s DMV website for specifics.)
A car may previously have been considered salvaged for a number of reasons, from flooding to being totaled after a collision. Whatever the reason, this means that an insurance company once deemed the damage to be more than it is worth repairing.
A rebuilt title does not necessarily mean that the car has been brought back to perfect working order. To upgrade the title from salvage to rebuild, a mechanic may have fixed only the most glaring issues that were preventing the car from passing state inspection, leaving aside any other problems. And usually when a car suffers an incident bad enough to award it a salvage title, chances are that incident caused other problems as well. Even if they are not obvious now, they may become more obvious with time and use.
This means that while paying much less for a car with a rebuilt title versus a clean title, you can expect to make up the difference in repair costs down the road – unless you consider yourself a DIY mechanic.
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Cars with rebuilt titles are harder to insure
One good reason to avoid a vehicle with a rebuilt title is that you will have trouble getting it insured. You will generally be able to get liability insurance for a renovated title, but getting comprehensive coverage will be a challenge. This means that if you are in an accident that damages the car, the insurance company will not pay you to repair or replace it, which means you will lose all the value you would otherwise have been able to pay for a clean title. To insure a car with
Reclaimed title means poor resale value
While you expect your car to depreciate in value over time, it’s good to know it’s still worth Anything when you want to get rid of it. But if your car’s title is repossessed, it will be worth much less-between 20% to 40% less, per Bankrate. You’ll also have more trouble finding a buyer, especially if you don’t know exactly what happened to the car before you took possession of it, nor how “fixed” it was. Your best bet would be to sell it to a business that offers to pay cash with no strings attached or conditions, and accept whatever lowball offer they make – at which point it will be replaced and Will be sold cheaply at auction.
Beware of deals that sound too good to be true
If a car is suspiciously cheap, be careful to inspect the title carefully. People don’t sell their car at a high price unless they have a good reason to do so. You should be able to enter the car’s make, model and VIN into an online database to see if there are any liens against it or if it has been involved in an accident. Some information is available for free, while some vendors may charge you $10 for a more comprehensive report.
Consider other deals to reduce the price instead
While it makes sense to look for cheaper options for a used car given the current inflated market, getting a re-titled vehicle can be more trouble (and money) than it’s worth. Instead, consider different compromises to reduce the price, such as a higher mileage range, less popular colors, or cosmetic dents and dings that don’t affect driveability. In addition to the other benefits of buying a car with a clean title, you’ll also have a better idea of what you’re getting into.