My stolen car was found after insurance already paid me for it — but now I want to buy it back. What should I do?

Stella was heartbroken when her car was stolen. Not only did she depend on it to get to work and take her kids to school, but it had sentimental value as well — she inherited the car when her grandmother passed away.

Stella reported the car as stolen to local law enforcement and to her insurance company. After several weeks, her insurance company declared the stolen car a total loss. She sent the title in and was paid out for the value of the car, which was only $5,000 because the car was about 15 years old.

A week later, Stella received word from law enforcement that her car had been found. She contacted the tow yard to let them know that the vehicle was hers, had been stolen and that her insurance company now had the title, but that she was going to look into buying back the car.

Now, Stella isn’t sure how to proceed. She needs to find out if she can get the car back, whether she can get a title and insurance for it and what happens to her insurance payout.

Stella’s insurance has paid out her claim, so the car is now their property — even if the process of transferring the title, which can take several weeks, hasn’t yet been completed. Nevertheless, it’s important that she immediately contacts her insurance company and lets them know the car has been recovered. (1)

As the car is the property of the insurance company, it has the right to sell or scrap it. However, some insurers may offer the previous owner the option to buy back the car.

If her insurer will let her buy back the car, Stella will likely be dealing with a salvage title. This means that Stella will have to have the car repaired, if needed, and it will have to pass a state inspection in order to obtain a rebuilt title and be insurable again. However, rules around this vary from state to state. (2)

For example, in Massachusetts, you would apply for a recovered theft title after your vehicle passed a salvage inspection. You’d also need to submit an application and the current salvage repairable title, and pay a fee. It can take four to six weeks for the application to be processed. (3)

Read more: Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now

Stella should ask her insurance company whether they will offer insurance for a vehicle that has a rebuilt title. Some insurance companies may flat out refuse to insure the car, while others may refuse to provide comprehensive or collision coverage.

Cost is another important consideration. Getting insurance on a rebuilt title can be expensive, as it represents a bigger risk to insurers.

It could take a lot of time, effort and money for Stella to get her car back on the road. Even though the car has sentimental value, she should think carefully about whether it’s a prudent decision to buy it back from her insurance company.

To make a decision, Stella should consider the cost to buy back the vehicle, the cost of any inspection and repairs it may require, fees for the title and whether she will be able to secure affordable insurance. She should also be aware that the process can be time-consuming and that rebuilt titles significantly lower a car’s market value.

Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Progressive (1); Capital One (2); Mass.gov (3)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.