Signing up for an auto loan on a used car with a branded title should be avoided especially for consumers with questionable credit
We know that even though bad credit lenders won’t finance used cars with a branded title doesn’t mean unsuspecting buyers won’t find themselves making payments on a car loan for one of these vehicles.
Here at Auto Credit Express we know this has happened because for the past two decades we’ve been helping consumers with damaged credit looking for online auto loans find those dealers that can arrange for auto loan approvals for these folks.
Car title problems
We occasionally receive complaints from consumers that have not applied through us that say they have been duped by dishonest independent sellers.
The results of some of these transactions are unfortunate – with problems ranging from minor electrical system issues to engine and transmission failures. It’s even more of a problem when this happens to consumers with poor credit that are on limited budgets.
So this is what used car buyers need to know:
If a used car or untitled new car has been involved in an accident or event serious enough to cause sufficient damage to declare it a total loss, if that vehicle can be repaired it must be issued what is known as a “branded title.”
Generally speaking, most banks, credit unions and even lenders that deal in subprime car loans will not finance cars having these types of titles.
Branded titles can vary by state but usually include the following types:
Rebuilt – A vehicle previously branded as “salvage” that has been repaired and inspected. These vehicles may be drivable, but having this type of title means that it was, at one point, a salvage vehicle.
Salvage – A vehicle with sufficient damage that would typically cost between 75% and 100% of its value to be repaired. In states with no rebuilt brand, salvage vehicles that have been repaired still carry a salvage brand on their titles.
Junk – a vehicle that can only be sold for scrap or used for parts
Flood Damaged – A vehicle that has been severely water damaged. In some states a flood damaged vehicle can be issued a title with either a salvage or rebuilt brand.
Fleet – Although these vehicles typically are not issued branded titles, most states require that vehicles previously used as taxis, daily rentals or police cars be designated as fleet vehicles.
Mileage unknown – Also usually not considered a brand, most states require that a title be notated if vehicle mileage is unknown due to odometer replacement or other related issues.
Stolen – Recovered stolen vehicles often don’t have their own a brand, although many states may refuse to title a stolen vehicle once it’s recovered. Due to the damage they can sustain, often many of these vehicles receive other types of brands so they cannot be re-sold.
Branded title differences
Depending on the state from which it is issued, the colors of branded titles can be the same or different from those of clean titles. Either way, branded titles will have a notation at the top or the bottom setting them apart from a regular title.
Avoiding branded title vehicles
Your best chance at avoiding buying a previously damaged vehicle is to first run its VIN number through the national database, request a vehicle history report and, finally, have it thoroughly inspected by both a certified master mechanic and a body and frame specialist. Needless to say, this should be done prior to signing any paperwork.
Just one more thing
Something else car buyers should know: if you’ve been turned down for a conventional auto loan, we want you to know that Auto Credit Express specializes in matching applicants with auto credit issues to dealers that can offer them their best chance at getting approved auto loans.
So if you’re ready to begin that process, you can start it now by filling out our online auto loan application.