Rebuilt cars are cheaper than other used vehicles. But it’s buyer beware

Anyone looking for a deal on a second-hand car these days should be aware that high demand has created opportunities for sellers of rebuilt vehicles who may not disclose a car’s history, auto industry professionals say.

Rebuilt vehicles are ones that have been put back together after severe damage from a collision or some other event like a hail storm or flood. 

“What it means is that the vehicle would have been deemed a total loss by an insurance company at some point for some reason,” said Stuart Klein, vice president of collision programs for the Automotive Industries Association of Canada.

When a vehicle is written off, it doesn’t necessarily mean it’s beyond repair, Klein told CBC Radio’s Cost of Living, “but the value of repairing it exceeds what the value of the vehicle was prior to the damage.”

After a car is written off, it’s often sold to a salvage yard. It may be scrapped for parts, but it could also get auctioned to someone who fixes it up. 

Dealerships have to disclose if a car has been rebuilt. But private sellers who list their vehicles for sale on platforms like Facebook Marketplace aren’t required to do so.

Nancy Shadlock, who lives in Calgary, unwittingly bought a rebuilt vehicle back in 2021 when, at the end of a maternity leave, her family needed a second vehicle. A listing on Kijiji for a Nissan Cube caught her eye.

“It was a 2010, and I think it only had about 50,000 kilometres on it,” said Shadlock, while other vehicles she saw had 150,000 or more. Plus, at $5,000, it was a steal, she said.

It was only when Shadlock went to register the vehicle that she learned about its rebuilt status. She said she was “a bit frustrated,” but ultimately decided not to go back to the seller to complain. 

The safety factor

If a buyer is lucky, a rebuilt vehicle could run perfectly well and pose no safety concerns. But Klein said the more complex technology of newer cars — particularly those from 2016 onward — means vehicle repairs have become a much trickier and more precise business. 

“You’ve got those blind-spot detectors in your mirrors and things like that. Those are all very high-tech systems, and they have sensors and radars and cameras and so on,” he said.

“And pretty much every system requires a recalibration after the vehicle’s been in any sort of an accident.”

If these aren’t done correctly, he said, a car’s assistive technology could put the brakes on for no reason if, for example, it misinterprets a telephone pole at the side of the road as an obstacle in front of the vehicle. 

The insurance issue

Not every insurance company is willing to insure rebuilt vehicles, Sherif Gemayel, an insurance industry expert in Calgary,…