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Is it fraud not to report a rebuilt title?

On Behalf of | May 20, 2022 | Consumer Protection

As you might know, most vehicles that dealerships put out are traded in or purchased at auction from wholesalers. Dealers receive information from the auction house, manufacturer or Carfax to learn more about the vehicle.

Usually, dealers are straightforward and provide information to their customers. This is particularly important if the vehicle has been in a crash in the past or has been rebuilt.

What is a rebuilt title?

To understand the issues that arise with rebuilt titles, you have to first understand salvage titles. Salvage titles are granted when a vehicle has been damaged to the point that an insurance company calls it a total loss. At that time, the owner or the vehicle, whether that is the insurance company or individual, is able to apply for a salvage title.

Salvage titles restrict vehicles from being driven, since the vehicles are damaged badly. Dealers or others may rebuild the vehicles, though, and then reapply for a rebuilt title.

Why rebuilt titles are bad

Rebuilt titles show that there were significant problems with a vehicle in the past due to water damage, a wreck or other circumstances. A buyer might have a more difficult time getting a loan for this kind of vehicle, or they may not be fully aware of all the damages that the vehicle had in the past.

Remember, too, that a rebuilt title only means that the vehicle is now in drivable condition. It doesn’t mean that it’s perfect or back to how it was when it was sold by the original manufacturer. Drivers may only be able to get liability insurance, and many insurance companies will outright refuse to insure these vehicles.

Failing to disclose that a vehicle has a rebuilt title is fraudulent, because drivers need to know what to expect while they’re behind the wheel. They also need to know what kinds of insurance they can get and when a vehicle may not be insurable. There is also no guarantee that the repairs were done correctly, so consumers have a right to decide if a rebuilt vehicle is the right choice for them without that fact being withheld.

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