What Is A Branded Title?

A branded title means that a vehicle has suffered some type of incident where the insurance company declares it a total loss. The state’s Department of Motor Vehicles (DMV) issues a new “branded” title to explain it. Some things that might result in an unclean title is a major accident, flood, fire, vandalism, theft, hail damage, or an odometer rollback. 

Common Types of Car Titles

Cars and trucks have branded titles for several reasons, leading to different types of titles based on their history and condition. The most common types are:

Clean Title

If the car’s title is clean, then it will not include a branding, and the pink slip should not have the words “branded” on it anywhere. Something to be careful of is that sometimes criminals take a branded title vehicle to a different state (that does not honor the brand) and register it as new to get a fresh, clean title. This is called title washing, and it is illegal. 

Lemon Car

When someone buys a new or used car or truck, and they experience a plethora of issues that cannot be fixed by the dealer or manufacturer, depending on state lemon laws, the car may be labeled a “lemon.” Each U.S. state has specific laws about what constitutes a lemon car. Usually, the car must be disabled for a certain length of time, and the owner has to bring it in for repairs three or more times without resolution.

Salvage Title

A salvage title means that a vehicle suffered such extensive damage that it can no longer be driven legally. If the insurance company determines that the cost of repairs exceeds the car’s value, they may deem it a salvage vehicle. When this happens, it is called a total loss or a totaled car and receives a salvage title brand. The vehicle is then rebranded as “salvage” and can be sold to a junkyard for parts or rebuilt. States have specific laws on what classifies as a salvage vehicle, so something in one state may be roadworthy might be unacceptable in another state. 

Water Damage

In some parts of the United States, floods are an issue. Suppose the car or vehicle has been in water, caused by a flood for two days (not necessarily submerged). In that case, it may suffer severe damage to the mechanical and electrical systems and interior furnishings. Water damage can lead to mold, mildew, and corrosion of electrical parts . In these cases, an insurance agent may declare it a complete loss due to water damage. In many cases, these cars have very little damage and they can easily be repaired and restored to new condition. Therefore, it is usually best to steer clear of flood-damaged vehicles.

Hail Damage

Hail is a problem throughout the U.S. and can cause a lot of damage to a vehicle, depending on the severity. It can cause an insurance company to declare a vehicle damaged or a total loss. When a car receives a branded title due to hail damage, it often remains highly desirable because, despite some cosmetic dents and scratches, it typically runs well. However, typically, hail damage is only cosmetic, and these cars could be a great deal because you may pay for a well-running vehicle that has a few dents.

Odometer Rollback

When you see a car with an odometer rollback or other odometer branded title, it means the odometer was tampered with or replaced, and there is no way to know precisely how many miles are on the car. Because the mileage affects value, it could be impossible to evaluate the vehicle properly. According to the NHTSA (National Highway Traffic Safety Administration), there are more than 450,000 vehicles on the road today with incorrect odometers.

Fire Damage

Whenever a vehicle suffers damage by fire, the state DMV office may give it a fire-damaged branded title. The damage may be light or extensive.

Vandalism

After a vehicle is stolen and held for a specific number of days, even if it is returned, the state may give it a vandalism title because the owner may never know what damage was done to the vehicle during its absence.

Rebuilt

After a serious accident, an insurance company may deem a vehicle a total loss. Once they do that, a mechanic could potentially rebuild the car bringing it back to usable condition. After the repairs are completed, the state agency (usually the DMV) will have to inspect it, and that agency will issue a rebuilt title so it can be driven legally or sold as a used vehicle. Before registering a rebuilt car, you must pass a safety inspection ensuring that the car is roadworthy. 

Junk Car

Unlike a salvage title vehicle, a junk car must only be used for parts and may never be rebuilt, repaired, or driven legally again.

Pros and Cons Of Buying a Branded Title Car

There are many pros and cons to buying a car with a branded title. Some common pros include:

Pros

• It can be much cheaper to buy a branded title car. If you can find one with minimal damage or enjoy fixing up cars, you could end up with a great deal.
• Some brand-new cars stored outdoors may be hail damaged, and you could afford a new (slightly dented) vehicle rather than having to buy used.
   

Cons

• Branded title cars are not great for resale, they aren't worth as much, and you may have trouble finding a buyer.
• You may also have trouble insuring it or getting financing to buy a branded title car.
• Even though the car may run and look fine, there could be severe mechanical, electrical, or other issues lurking beneath the hood.
• You could end up spending more fixing a branded title car than buying a perfect car with a clean title.

Branded Title Frequently Asked Questions

  What Is Title Washing?
When a vehicle suffers damage and has a branded title, sometimes criminals transport the car across state lines and register it clean with a new title. This practice is called "title washing", and it's illegal. Each U.S. state has different criteria to determine a branded title. Some damage in one state would mean the car would be labeled salvage, but it may not in another.
 How to Avoid Buying a Car with a Branded Title
Always perform a VIN check before you buy a used vehicle. Find out all you can about its history and any brands, accidents, or other issues with it. You should also have a trusted mechanic look over the vehicle thoroughly before you make your decision to purchase. A good mechanic can easily spot issues you may miss. Only buy from a reputable, trusted dealer and stay away from private sales with branded titles.
 Is it Bad to Buy a Car with a Branded Title?
It depends on the vehicle. Some may be less expensive but a good deal because the damage is only cosmetic. In other cases, the car may look fine from the outside but have serious mechanical or electrical issues. You want to be as careful as possible and arm yourself with as much information as you can before making a purchase decision.