Consumer Car Buying Advice Blog

Before signing on the dotted line for a bad credit car loan you should be aware of what branded titles and other notations on your vehicle title mean.

Who we deal with

People with bad credit can be particularly vulnerable to used car selling scams. That’s why BBB accredited web sites such as Auto Credit Express only work with legitimate dealers who work with a broad spectrum of lenders and specialize in auto loans for bad credit. The best of these web sites have helped people just like you raise their credit scores and reestablish their auto credit by filling out an online bad credit auto loan application and financing a vehicle with a second chance auto loan through one of their affiliate dealers.

You may have also noticed that the really good web sites try to provide their applicants with the information they need in order to make educated decisions about the kind of loan they should choose (such as a tote the note loan versus a bad credit auto loan). The reasoning behind this is simple: a poor decision at this time could result in an unaffordable car payment which could turn into in a repossession that could lower your credit scores even further.

Car titles

But in addition to making the right choices concerning a vehicle loan, car loans with bad credit buyers should also be aware of the different types of titles that are issued to used vehicles.

The majority of used cars in today’s market – and the only vehicles a legitimate bad credit lender will finance – have what is known as a clear title. This means that the vehicle has either not been in an accident or, if it has, the damage wasn’t sufficient to declare it a total loss (by the way, this means that even with a clear title, you should ask for a vehicle history report and have the car inspected, since there could be hidden damage caused by an accident that wasn’t severe enough to declare the vehicle a total loss).

If a vehicle has been in an accident or flood that has caused enough damage to declare it a total loss, it is issued what is known as a “branded title.”

Branded vehicle titles

A vehicle with a branded title has either a different-colored title with a notation on it or a notation at the bottom of a regular-looking title to differentiate it from a clean title.

Title brands vary by state and can include the following types:

Rebuilt Title – This is a vehicle that was previously branded as “salvage” but has been repaired and inspected. Even though these vehicles may be driveable, the rebuilt title permanently documents the vehicle as having been, at one time, a salvage vehicle. Bad credit lenders will not finance a salvage branded vehicle.

Salvage Title– This is a vehicle that has been damaged and would, according to state law, usually cost between 75% and 100% of its value to be repaired. In some states, the rebuilt brand does not exist and salvage vehicles that have been repaired still carry the salvage brand on their titles. Bad credit lenders will not finance a salvage vehicle.

Flood Damaged Title – This is a vehicle that has been damaged by water. A flood damaged vehicle can also be classified as a salvage or junk vehicle in many states. Bad credit lenders will also not finance a flood damaged vehicle.

Junk Title – a vehicle that can only be sold for scrap or used for parts

Fleet Title – Although usually not a brand, most states require that any vehicle that has been used as a taxi, for a daily rental or in police use be designated as a fleet vehicle. Lenders may or may not finance a fleet vehicle.

Mileage unknown – Mileage unknown is not a brand, but most states require that a title be notated if the mileage of the vehicle is not known due to an odometer replacement or other issues. May lenders will not finance a vehicle if the mileage is unknown.

Stolen Title – Like a fleet vehicle, a stolen vehicle is also usually not a brand, although many states can also refuse to title a vehicle once it has been stolen. Due to the damage often done to stolen vehicles, many are branded so that they can’t be re-sold.

Branded title issues

In the practice of “title washing”, a vehicle with a branded title is purchased in one state and then re-titled in another state with a clear title. In many instances, obtaining a vehicle history report and having a car inspected can uncover the fact that the supposedly “clean” title the car has is actually the result of a washed title.

If you are a customer buying a car with a second chance car loan, you need to be aware of the fact that no legitimate bad credit lender will finance a branded vehicle. Most of them will also not finance a fleet vehicle or a vehicle with unknown mileage. If you are asked to sign this type of title, you should refuse, since these vehicles have a market value that can be half that of a vehicle with a clean title.

In addition, it may be difficult to both license and insure this type of vehicle in your state.

As we see it

Be especially careful when signing the title to a used car. In most cases, if it is a branded title, you should walk away from the deal – especially if you are financing it using car loans with bad credit.

At Auto Credit Express we have helped thousands of people with bad credit buy cars and reestablish their auto credit at the same time through our national network of affiliate dealers that specialize in bad credit car loans.

So if you are serious about getting your credit back on track, why not begin a new chapter in your life by filling out our bad credit car loan application now.

Tags: auto credit, Bad Credit, bbb, branded title, branded titles, car title, clean title, credit, credit score, fleet title, flood damage, flood damage title, junk title, rebuilt title, repossession, salvage title, stolen title, tote the note, used car

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