When a car becomes damaged to a point that the repair costs exceed a certain portion of the car's value, the car is considered a "total loss." The exact ratio of repair cost to vehicle value that is considered to be a total loss varies from state to state, but is generally at least 70%. When a vehicle is a total loss, the insurance company normally takes title to the vehicle and can sell it with a salvage title for a licensed body shop to rebuild.
In most states, a salvage title means that a vehicle is not roadworthy and cannot be registered to be driven on the highway. A rebuilt or reconstructed title vehicle, sometimes referred to as an "R" title, is one that has passed a state inspection to make sure the damage has been repaired to a point where it is safe to operate on the road. The rebuilt title inspection is not the same as an annual state safety inspection for a non-salvage title vehicle.
Buying a salvage or rebuilt title vehicle is extremely risky. Unless you are a licensed body repair technician, you should never knowingly purchase a salvage vehicle for anything but parts because it cannot in most cases be licensed or insured. A rebuilt title vehicle can normally be registered to drive, but it will be difficult to get insurance. Another issue with rebuilt title vehicles is safety. While the vehicle does have to pass an inspection to make sure that it has been repaired enough to be safe to drive, the state inspectors can only see limited parts of the vehicle. The state inspector can't dismantle the vehicle to make sure the repairs were correctly done, so it is not difficult for an unscrupulous body shop to cover up a shoddy or non-existent repair so that the vehicle gets the reconstructed title but is still not safe. Also, even if vehicle damage is repaired to a point where it is safe to operate and given a rebuilt or reconstructed title, the vehicle can still have serious mechanical issues that do not surface until shortly after purchase that can far exceed the purchase price of the vehicle to repair.
In addition to the safety concerns, salvage and reconstructed vehicles are worth substantially less than non-branded title vehicles. If the title brand is not showing on the CarFax or AutoCheck or other vehicle history report at the time of purchase, the vehicle history will most likely be updated at some point with the title brand to alert potential buyers. Even if the vehicle history report is not showing the vehicle as reconstructed or salvage title, a seller who knows that the vehicle has such a title and sells the vehicle without disclosure is committing fraud.
Dealerships have ways to hide the fact that a vehicle was declared a total loss and was not issued a rebuilt title. Often this is done through buying and selling across state lines multiple times so that the title brand gets lost or "washed" by the time it is put on the lot. A dealership has an obligation to fully disclose a total loss designation or a salvage or rebuilt title. If you were sold a car and were not told that it was a total loss, or had a salvage or reconstructed title, contact Roseman Law Firm for a free consultation to review your case.