Understanding Branded Car Titles: What You Need to Know
When shopping for a used car, sellers often emphasize the title status as a selling point. While everyone desires a “clean title” vehicle, there are alternatives that come with potential risks but offer a lower purchase price. Branded titles, on the other hand, can be a bit of a mystery. Reading the Carfax report may not provide the full story, leaving buyers in the dark about what each brand actually means.
What is a Branded Car Title?
Think of a branded title as a stamp on a car’s history, indicating that something significant has happened to it. Branded titles typically come from insurance companies paying for repairs after a serious accident. If the damage is extensive enough, the insurance company will declare it a total loss, meaning that the cost of repairs exceeds the vehicle’s value. Salvage or rebuilt titles also fall under the branded category.
Explaining Clean Titles
A clean title signifies that a vehicle has not been involved in any recorded serious accidents or collisions, hasn’t been stolen, and isn’t a lemon-law buyback. It can be registered and insured without any issues. However, it’s important to note that a clean title doesn’t guarantee a problem-free car. There may still be off-record damages that have been repaired. Therefore, it is essential to conduct a thorough pre-purchase inspection even for clean-titled vehicles.
Removing a Branded Title
Altering a car’s title to remove a brand is illegal. Once a brand is assigned to a title, it remains with the vehicle for its entire lifespan. However, it is possible to change a Salvage Title to a Rebuilt Title by repairing and inspecting the vehicle.
Beware of Title Washing
Buying a used car across state lines can have its own set of challenges. Each state issues its own vehicle titles, and not every state follows the same title branding procedures. Some unscrupulous sellers may attempt to “wash” the vehicle’s title from a branding by selling it in another state. However, it is illegal to engage in title washing. To protect yourself, it is crucial to obtain a full title check and consider a pre-purchase inspection when buying a used car from another state.
Understanding Different Title Brands
There are several types of branded titles that buyers should be aware of:
1. Salvage Title: A car deemed “totaled” due to repair costs exceeding its value. It does not indicate that repairs have been performed. Salvage-titled vehicles cannot be registered or driven until they are roadworthy, and each state has its own rules regarding salvage titles.
2. Rebuilt Title: Once a salvage-titled vehicle is repaired, it can return to the road. Rebuilt cars can be registered, insured, and financed, but their value is significantly affected by the branding. Ensuring proper repairs are essential to avoid future surprises.
3. Lemon Law Buyback Title: Lemon law buybacks refer to cars that have had multiple unsuccessful attempts to fix a recurring issue. Automakers may repurchase such vehicles, but they can still be sold again. While they can be budget-friendly options, like rebuilt titles, they impact the vehicle’s value and may require specific lenders and insurers.
4. Odometer Rollback: Lower mileage is often desirable, as it suggests less wear and tear. Although tampering with modern vehicles’ mileage is difficult, it is still possible. Detecting tampering requires a thorough pre-purchase inspection.
5. Other Types of Brands: Flood damage, hail damage, and other scenarios can also result in title branding. Regardless of the brand’s severity, it is crucial to do your homework and have the vehicle inspected to avoid future issues.
Should You Buy a Vehicle with a Branded Title?
The decision to purchase a vehicle with a branded title depends on individual circumstances. While it can save you money upfront, other aspects of ownership, such as insurance rates and interest, may be more expensive. Reselling the vehicle down the road will also result in lower values. Branded-title vehicles can be great for projects or modifications but should not be considered investments, even if they are rare. Conducting a pre-purchase inspection is essential to fully understand the vehicle’s condition and potential future costs.