What is a Branded Title?
Buying a used car can be a great way to save a lot of money. It’s essential to know precisely what you are buying, and if you don’t explore the option of purchasing a car or truck with a branded title, you could be leaving money on the table.
Branded Title Meaning
Any car that is involved in an accident or other insurance-related incident will have a branded title. Vehicles exposed to floods, fire, or other acts of nature are included in this group. A car cannot be branded by a private citizen but only by the state agency that handles motor vehicle issues. This is typically a department of motor vehicles (DMV) or a similar government entity.
The new title issued to the vehicle will describe the type of damage that has occurred. Cars and trucks with significant enough damage that the insurance company “totals” them will also have a branded title.
Types of Branded Titles
There are a few different types of branded titles based on the incident that took place and the kind of damage the car suffered. Below are some common types of title brands, but keep in mind each state may have a different definition of each one.
When someone buys a new car from the dealership and it has significant defects that affect major systems, and the owner takes it in for repairs, usually multiple times and it cannot be fixed, the car or truck may be labeled a “lemon.” Each state has specific lemon laws regarding the number of repairs necessary or the time the automobile has to be in non-working condition to be branded with a lemon title. Typically, these issues make the vehicle unsafe to drive, and it would not make sense to buy one for transpiration. These cars are good only for parts.
Another type of branded title is a salvage title, sometimes known as a junk title, where the vehicle has suffered so much damage that it cannot be registered or driven legally. These cars often end up in salvage or junkyards, where people scavenge them for parts. These vehicles have been declared a total loss by the insurance agency, and it is not worth the cost of repairing them.
Because some states have different rules for what constitutes a salvage vehicle, scammers often take vehicles across state lines to register the car and get a new/clean title. This practice is called “title washing,” and it is illegal.
If a vehicle suffers a major accident and the insurance company deemed it a total loss, but then an automotive expert, repairs it to roadworthy condition, they can apply to have it titled with a rebuilt title. However, some specific requirements and tests need to be performed before the state will issue a rebuilt title.
If you decide to buy a rebuilt car, check into what type of damage it incurred and how the repairs were performed.
When criminals tamper with an odometer to make it appear that the car has fewer miles, those vehicles receive an odometer rollback title. There is no way to know exactly how old the car is and how many miles. Be careful with this one.
If a car is subject to flood damage, it can result in mold, mildew, and electrical damage. Water-damaged vehicles may be labeled with the words water damage on the title and may be something to stay clear of when shopping for a new car.
Hailstorms are common and typically damage the paint and exterior of the vehicle. A hail-damaged car may not look pretty, but it might be a great way to save money on an otherwise perfectly running vehicle. Automobiles subject to hail may have a hail damage branded title, and they may be priced well below fair market value.
If a car is stolen and gone for a specific number of days, the insurance company may declare it a total loss, even if it is found later and in seemingly good condition. There is no way to tell what damage it suffered while in the hands of thieves. A state may declare that vehicle a theft branded title. It may be fine, but there may also be hidden issues. Some automobile insurers may not want to cover a car with damage or a branded title.
Things to Be Careful with When Buying a Branded Title Car
One thing you will want to be very careful about when buying a branded title car is the structural integrity of the vehicle, like crumble and crush zones that may be damaged if the vehicle was in a previous accident.
Be sure to check out the electrical systems and all wiring. Flood damage and fire can do a number of these types of systems.
One other thing to check is the safety systems. All newer cars come equipped with at least airbags, and some have other more sophisticated features that help keep the vehicle safe. Thoroughly test each of these or have a mechanic hook the car up to a computer to make sure they are functional before buying.
Should You Buy a Car with a Branded Title?
If money is an issue or you just want a great deal, you can consider buying a used vehicle with a branded title. However, you will want to do plenty of research and learn as much as you can about it. Run a VIN (vehicle identification number) check online to get the vehicle history report to find out all about the vehicle’s origins and then talk to whoever repaired it, or you can contact the state about the branded title. You may also be able to speak to the insurance company that declared it unsafe. There are third-party options like Carfax or InfoTracer, where you can get information about a vehicle.
If you want to be sure you are buying a perfect, roadworthy car or truck, stay clear of branded title vehicles. The only one that car buyers can be pretty sure would be okay is a hail-damaged car. The damage there is almost always cosmetic only, and structurally and operationally, the vehicle should function perfectly.
Either way, have your mechanic thoroughly examine all parts of a used car before you buy it. Talk to the original owner, the repair shop, and anyone else connected to it before purchasing. The more you find out, the better and fewer headaches you will encounter down the road.