When buying a used car or other vehicle, inspecting its condition is a must to avoid unforeseen repairs. A professional mechanic can help you do just that.
However, not all car problems are immediately apparent from their physical condition alone. Sometimes, the previous owner hides everything so well that even a professional mechanic cannot spot the flaws.
That’s where a vehicle title comes into play. When a vehicle gets involved in trouble or is damaged due to accidents or natural disasters, it gets stamped with a branded title that will be attached to its vehicle identification number (VIN).
These titles are typically assigned after the vehicle has been in an accident damaged by flood, hail, fire, or vandalism. Not only that, if a vehicle has an outstanding lien record, it will also get a title.
What is a Branded Title Vehicle?
If you’re shopping for a used car, you may have seen the term “branded title.” But what exactly does it mean? A branded title vehicle is a car, truck, or SUV that has sustained significant damage or issues, causing its title to reflect this history. A state’s DMV assigns these titles to alert potential buyers about the vehicle’s past.
Branded titles are essential because they can affect a vehicle’s safety, value, and insurability. Let’s dive into what branded titles entail and how they might influence your decision to buy a car.
Types of Branded Titles
Not all branded titles are the same. They vary depending on the type and severity of the damage. Here are the most common types:
Salvage Title
A salvage title is issued when an insurance company declares a total loss on a car. This means the repair costs exceed a certain percentage of the car’s market value, usually due to an accident. Salvage cars cannot legally be driven until they’re repaired and inspected.
Flood Title
Vehicles with flood titles have suffered water damage, often from hurricanes or flash floods. Water can ruin a car’s electronics and mechanical systems, making buying risky. Over time, flood-damaged cars may also develop mold or rust.
Rebuilt Title
A rebuilt title is assigned to a car once a salvage vehicle but has since been repaired and deemed roadworthy after inspection. While these cars can be a bargain, their prior damage may still affect long-term reliability.
Lemon Title
Lemon titles are given to vehicles with chronic defects or recurring issues, typically covered under state lemon laws. The manufacturer often repurchases these cars because they could not be repaired to meet quality standards.
Why a Vehicle Might Receive a Branded Title
Several factors can lead to a vehicle receiving a branded title. Common reasons include:
- Accidents: Severe collisions that result in extensive repairs often lead to salvage or rebuilt titles.
- Natural Disasters: Flooding, fires, or hail can cause irreparable damage to a vehicle.
- Mechanical Failures: Repeated breakdowns or manufacturing defects can earn a lemon title.
- Theft Recovery: If a stolen car is recovered after the insurance claim is paid, it may receive a branded title.
Pros and Cons of Buying a Branded Title Vehicle
Buying a branded title vehicle can be a mixed bag. Here are some points to consider:
Pros
- Lower Price: These vehicles are usually priced 20–50% less than similar cars with clean titles.
- Availability: You can sometimes find rare or high-end models for a fraction of their market value.
Cons
- Hidden Issues: Damage may not always be fully repaired, leading to costly fixes later.
- Limited Warranty: Many branded title cars no longer qualify for manufacturer warranties.
- Resale Challenges: Selling a branded title vehicle can be tough due to its stigma.
Always weigh the risks against the potential savings when considering a branded title car.
How a Branded Title Affects Insurance, Financing, and Resale Value
Branded title vehicles can complicate things when it comes to insurance, financing, and resale:
- Insurance: Insurers may charge higher premiums or refuse to provide full coverage for these cars.
- Financing: Some lenders are reluctant to offer loans for branded title vehicles. If financing is available, the terms may not be favorable.
- Resale Value: Branded title cars typically have a lower resale value and appeal to fewer buyers.
The Importance of Checking a Vehicle’s History Before Purchase
A thorough investigation is necessary when buying a car with a branded title. A vehicle history report provides key details like past accidents, repair records, and ownership history. Skipping this step could leave you with unexpected problems down the road.
For example, some branded title vehicles are repaired poorly or not inspected properly. A detailed history report can help you verify the repairs and ensure the car’s safety.
Related: Importance Of Accurate Car Reports To Used Car Buyers
Avoid Surprises with Instant VIN Reports’ Comprehensive Insights
Instant VIN Reports offers tools to help you navigate the complexities of branded title vehicles. You can uncover the story behind any used car with services like VIN decoding and vehicle history reports. This includes details about accidents, title changes, and even manufacturer recalls.
Their platform also provides access to window stickers, which can reveal the car’s original features and specifications. This is especially useful when assessing whether a branded title car meets your needs.
Related: The future of car-reporting technology and how it benefits consumers
A branded title vehicle can be a cost-effective option for the right buyer but it comes with risks. Understanding the different types of branded titles and their implications is key to making an informed choice. Always verify the car’s history with a detailed report and consider the challenges of insuring and reselling it.
Before you bag the vehicle, use tools like Instant VIN Reports to decode the VIN and get a comprehensive vehicle history. With the proper knowledge and information, you can decide whether to buy a branded vehicle.
