Cosmetic damage on an automobile is categorized as damage that does not hamper the operational performance of a vehicle. This type of damage typically does not require extensive corrective repair beyond repairing/replacing a part or paint job. Cosmetic repairs are not mechanical or operational repairs, but defects that are visual in nature. Paint scratches, chips and dings on the body, a crack in the windshield, or a scraped bumper are common examples of cosmetic damage. While an auto may have some light cosmetic damage, the repair costs could be rather significant depending on the car, causing some owners to postpone repairs.
For more info, see A Rebuilt Car Title: Pros vs Cons