Consumer Car Buying Advice Blog

Before signing on the dotted line for all credit auto financing you should be aware of what a branded title means and how it could affect your cars resale value

What we do

If you have bad credit you may be considering buying a used car from a dealer that offers all credit auto financing. We’re aware of this because for more than two decades Auto Credit Express has been working with poor credit customers.

In fact, after seeing the embarrassment and problems that customers with bad credit often experience, we created a web site with videos, a resources section and a secure bad credit auto loan application – matching our applicants with dealers that specialize in customer credit issues.

The alternative, buying a vehicle from a tote the note, all credit auto financing dealer won’t help since these dealers don’t report to the credit bureaus. It can also result in a greater chance of repossession – and contribute nothing towards your car credit repair efforts.

People with bad credit can also be particularly vulnerable to used car title issues, which is what we’ll touch on today.

Vehicle titles

The majority of used cars in today’s market – and the only type of car 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 (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 it 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 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 but usually include the following types:

Rebuilt – 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. Although bad credit lenders will not finance a salvage branded vehicle, dealers that offer all credit auto financing will.

Salvage – 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, but, again, many all credit auto financing dealers will.

Flood Damaged – 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. Lenders offering auto loans for bad credit will not finance a flood damaged vehicle, while dealers offering all credit auto financing have no problem selling this type of car.

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

Fleet – 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. Dealers offering all credit auto financing will usually 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. Many dealers that offer all credit auto financing will sell you this kind of vehicle.

Stolen – 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 is 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.

You should also be aware of the fact that it may be difficult to both license and insure this type of vehicle in any state.

The bottom line

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 – even if the dealer offers you all credit auto financing.

At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help them. Our affiliate dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance at getting approved for a car loan.

So if you are serious about getting your car credit back on track, give us a shot before going to a dealer that offers all credit auto financing by filling out our bad credit car loan application now.

Tags: Bad Credit, branded titles, Used Cars

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