What a Branded Title Means on a Car

What Is a Branded Title?

When a car title is branded, it means it has sustained enough damage, typically through an accident or a natural disaster, for the car to be a total loss to the insurance company. Upon inspecting a car after damage, the insurance adjuster will determine if the vehicle will get a branded title.

If a car hasn't sustained a total loss, it most likely has what's called a clean title. If a used car or an untitled new car has been involved in an accident or event that caused enough damage to declare it a total loss, if it can be repaired, that vehicle is issued what is known as a "branded title."

As a rule, banks, credit unions, and even lenders that offer only high-risk car loans will not finance cars with these types of titles.

When it comes to branded titles, it means something drastic has happened to a vehicle, usually an accident or disaster that caused enough damage to declare it a total loss. However, some titles also brand a car as having been used as a commercial vehicle.

There are a few different types of branded titles, and these vary depending on what happened to the car, what the vehicle was used for, and the state where it was titled. Here are the most common examples of title brands:

• Salvage – A car that had so much damage it would cost 75% to 100% of the vehicle’s total value to repair it (commonly referred to as “totaled”).
• Rebuilt/reconstructed – A car that had a salvage title, but has since been repaired and inspected. Some states don’t have this title, which means some repaired vehicles can still have a salvage title after inspection.
• Junk – A car that can only be sold for scrap or parts.
• Flood damage – A vehicle that had extreme water damage, with some states allowing a flooded car to be rebuilt.
• Fleet – A title for taxis, rentals, and police vehicles. This title is required in most states when these vehicles hit the resale market.
• Lemon – This varies by state, since state laws differ when it comes to cars that have been labeled lemons. Generally speaking, a lemon is a vehicle covered by a manufacturer's new car warranty that has had a serious issue with repeated attempts at repair with no success.

How to Check for a Branded Title?

In order to check if the title on a vehicle is branded, you can check the title itself to see if a brand is issued. If you don't have the title or haven't seen it, you can typically look up a vehicle with its VIN or Vehicle Identification Number. This number is located on the driver's side, at the bottom of the windshield.

Once you have this number, you can look online at various websites to see if the vehicle has a brand. Some popular ways to look up a VIN include Carfax, VINcheck, AutoCheck, or your state's DMV.

How Branded Titles Affect a Car's Value and Safety

When you purchase a vehicle with a branded title, you may be taking a chance on your safety. Many cars that have sustained major damage, especially to the frame can be hazardous to drive after the fact.

Not only can it be dangerous to drive these vehicles, but the value of the car can go down as well. A car with a branded title won't have the same value as a similar one with a clean title. A salvage title is typically the most daming to a car, and could bring down value by 30% to 60% or more on average.

Should I Buy a Car with Branded Title?

Typically, franchised dealerships won’t buy or sell vehicles with branded titles. This means that most branded titles cars for sale are usually from private sellers or smaller used car lots, both of which can come with additional risks.

It can be tempting to buy a vehicle that has a rebuilt title, since it’s probably going to be much cheaper than one with a clean title. But for a car to have a rebuilt title, it's typically suffered some heavy damage, and has required extensive repairs to make it drivable.

There are some instances where replacing a bumper on a vehicle could cost more than the value of the entire car, which could make buying one with a rebuilt title a good deal. On the other hand, if replacing the bumper totals the vehicle, is it worth buying a car that doesn’t hold a lot of value? Since there are many risks involved when you’re buying a vehicle with a rebuilt title, it’s important to do your research to avoid wasting money and/or time.

You never really know what you’re buying unless you know the complete history of the car, exactly what damage it had, and what was done to salvage it. There are many sites that allow you to run a vehicle's VIN through a database and gather information about the car's history, such as the National Highway Traffic Safety Association (NHTSA). You should also get any used vehicle you plan on buying – especially one with a rebuilt title – inspected by a certified mechanic before you buy it.

If you’ve got your heart set on a branded title car, keep in mind that you may end up having to pay cash for it. Most lenders won’t approve a loan for a vehicle with a branded title. If you’re a bad credit borrower, it could be extremely difficult to get approved for an auto loan by a traditional lender, as well as a subprime lender, on top of the car having a branded title.

How to Insure a Car With a Branded Title

It can be very difficult to insure a car with a branded title. It is still possible, but not all insurance companies will cover a vehicle with a brand. Due to the nature of a branded title, know that it will probably not be able to be fully covered by insurance. You may be able to get liability, collision, or comprehensive coverage, but full coverage typically isn't in the cards for one of these vehicles.

Be sure to rate shop when check on insurance for a branded title car.

Getting Into Your Next Car

The bottom line when it comes to branded titles: it’s probably best to avoid them as a general rule. Some branded title vehicles could be a great deal – some could end up costing you a great deal of money in repairs down the line. Additionally, it can be hard to get approved for a loan on a car that has a branded title, even more so if you’re struggling with credit issues.

If you’re in need of an auto loan, but don't think you have the credit to qualify, think again. Don't throw your money away on a risky cash sale for a branded title vehicle, start with us at Auto Credit Express. We match bad credit borrowers to dealerships that have real lending options for credit-challenged consumers. To begin, fill out our free car loan request form, and we’ll look for a dealer in your area!