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Branded Title
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Many people may not have heard of a branded title or know what it means in terms of automobiles, but it’s a common term in the salvage and insurance industry.
What is a Branded Title?
You may be wondering what does a branded title mean? A branded title is a vehicle that has sustained a significant event such as a severe accident, flood or fire damage, and even an odometer rollback. If the car was in a bad hailstorm, that also might qualify. Once the insurance company declares the vehicle a total loss, the state Department of Motor Vehicles (DMV) issues a new title showing the brand. The new title will stay with the vehicle for the rest of its usable life.
What Does Branded Title Cars Mean?
The term branded title car means the automobile has suffered extreme damage either through a major collision, the weather, or someone tampering with the odometer. Basically, it means the vehicle has been in some type of extreme situation which has rendered it (at some point) a total loss. Even if a mechanic repairs the issue and restores the vehicle to brand new condition, the branded title will remain permanent.
Types of Branded Titles
Although state laws may vary, there are typically five types of branded titles. They are:
Salvage Title Brand
When an automobile is in a severe accident, and the insurance company determines that the cost of repairs outweighs the car’s value, they label it a total loss or salvage vehicle. States have different criteria for marking a car salvage or total loss. In some cases, if the car or truck is vandalized or stolen, it may also qualify. It is possible that these vehicles can actually be repaired and restored to new condition, but the value will never be as much as a car or truck with a clean title.
Lemon Title Brand
A lemon car is one that has a severe mechanical or electrical safety issue, and the manufacturer has tried unsuccessfully to fix it. When this happens, it can legally be declared a lemon, and then the title will be branded to reflect that.
Water Damage Title Brand
In some parts of the country, hurricanes and floods are frequent. If a car left unprotected is flooded for two days, an insurance company will label it water damaged. Severe water damage can impair the electrical systems, engine, and ruin a car or truck’s interior. Typically, these cars will be farmed out to salvage yards for parts. A company can purchase the vehicle and restore it for resale.
Hail Damage Title Brand
Hailstorms can be extremely damaging to a vehicle’s exterior. In terms of insurance, the car or truck may be labeled a total loss or salvage vehicle, but in terms of resale, typically, the cars only suffer cosmetic damage and will operate fine. Generally, the body and glass may be damaged, but the car’s electrical systems, engine, and mechanical parts should be fine.
Odometer Rollback Title Brand
Criminals frequently tamper with a car’s odometer rolling back the numbers, so it appears the vehicle has far fewer miles on it than it actually does. An unsuspecting buyer may not know the difference. If the crime is discovered, the state may issue an odometer rollback title brand so that any subsequent owners understand that the odometer has been tampered with, and it’s unclear how many actual miles are on the car and what the real value is.
Should You Buy a Car with a Branded Title?
By now, you may have an instant bias against branded title cars, but it may not be totally justified. Whether or not to buy a car with a branded title is a personal decision, but consider these facts first.
If a car that has experienced some major event has been professionally detailed and restored to perfect condition, the value will remain lower. You can purchase a near-perfect vehicle for up to 40% less than fair market value. Branded title cars have become very popular over the past few years, and some companies like AutoSource specialize in purchasing branded title vehicles and restoring them for resale.
Some types of branded title cars are very desirable because the damage is minimal and easy to fix. According to AutoSource, flood and hail damaged vehicles are the most requested by their customers. Some branded title vehicles are very easy to repair and could be a great value for a discerning buyer.
The key is before buying a branded title car; you should check the VIN using one of the many online search tools to see if the title is clean or branded and what type of damage or event it has incurred. That way, you know exactly what you are getting. Be sure to deal with a professional, reputable dealer who you know specializes in branded title vehicles and restoration.
What is a Branded vs. Salvage Title?
You might also be wondering what the difference is between a branded vs. salvage title. There are a few differences. First, some DMV offices will brand a title for things like flood or hail, but the car is still safe to drive and can be re-sold, especially if it has been restored/repaired. With a salvage title, once the insurance company determines that it is a total loss/salvage vehicle, is it illegal to drive it and must be sold to a salvage yard or at public auction for spare parts. It cannot be registered or driven ever again.
Depending on the state, the branded title may be a serious issue or not. For example, if you have a fender-bender and the car is labeled with a branded title, if the dealership restored it back to new condition, although the value would be less, it would be a perfectly good car to own and drive.
What is Title Washing?
Because each state has different laws regarding branded titles, fraudsters may sell a car in another state that does not recognize the branded title, and when the new title is issued, it will be “clean.” This practice is referred to as title washing. You should always be careful to watch out for this kind of con when buying a used car. Always perform a VIN number check before purchasing the vehicle to get the whole story and full vehicle history report.