Have you ever come across a used vehicle listing with an unusually low price, only to discover it has a “branded title“?
A branded title indicates that a vehicle has a troubled past – it likely sustained major damage, was flooded, had fraudulent odometer tampering, or was deemed unsafe to drive.
This article will break down everything you need to know about the risks and potential rewards of buying cars that have a brand on their title.
Key Takeaways
- Branded titles are designations applied to vehicle titles by the DMV indicating past damage, defects or other concerning history
- Major types of title brands include: salvage, rebuilt, flood, lemon law buybacks and odometer rollbacks
- Branded titles can help buyers beware of vehicle issues, but title washing hides brands across state lines
- Branded title vehicles may sell for 20-40% less than clean title cars, increasing affordability
- Benefits beyond lower prices include accessing better-equipped rides, while drawbacks range from steep depreciation to lingering mechanical defects
- Careful inspection, research, contracting and budgeting for added costs are key to purchasing branded title cars
Table of Contents
What Are Branded Title Vehicles?
In short, branded title is a permanent designation applied to a vehicle’s title by a state’s Department of Motor Vehicles (DMV). It signals that the vehicle endured events that potentially impacted its integrity and value.
Common scenarios leading to branded titles:
- An insurance company declares the car a “total loss” after an accident when repair costs exceed its cash value
- The car is flooded or waterlogged after a hurricane or flood
- There is “odometer rollback” fraud – the true mileage is illegally altered
- A new car has severe defects and is repurchased under “lemon laws”
These title brands stick with cars permanently, even after repairs or resale. Now let’s explore the different types you may encounter.
Types of Branded Titles
While specific title brands vary by state, below are some of the most prevalent:
| Title Brand | Definition | Potential Issues |
|---|---|---|
| Salvage | Designates vehicle previously deemed a total loss after major damage; Repairs may have been performed | Structural/mechanical defects; Safety concerns |
| Rebuilt | Applied after salvage title car is repaired and inspected; Special certification may be required | Lower resale value; Pre-existing defects resurfacing |
| Flood | Signals prior water damage from a flood or hurricane | Rust/rot issues; Mold/mildew; Damaged electronics |
| Lemon Law | Indicates manufacturer repurchase under state lemon laws for chronic defects | Initial problem recurrence; High depreciation |
| Odometer Rollback | Discovered fraud where true higher mileage of vehicle was hidden | Excess wear concerns; Suspicion of hidden issues |
| Certificate of Destruction | Severe structural or mechanical damage that is so severe it cannot be repaired | Severe structural or mechanical damage that are so severe it cannot be repaired |
Pros and Cons of Buying Branded Title Vehicles
Affordability – Vehicles with branded titles often sell for 20% to 50% below comparable cars with clean titles. This allows stretching car budgets further.
Feature-Packed Rides – The Lower Price of Branded Cars makes it easier to purchase newer vehicles that might be out of your budget otherwise.
Minor Damage – In some cases, the issues triggering a branded title may be relatively minor or mostly cosmetic rather than mechanical.
Potential Drawbacks of Purchasing Branded Title Vehicles
- Resale Challenges – Branded titles slash resale value. Many buyers hesitate purchasing such vehicles, making selling harder.
- Financing Difficulties – Lenders view branded title cars as high risk, so fewer financing options exist. And those available often have higher interest rates.
- Insurance Obstacles – Similarly, insurers consider branded title vehicles riskier to cover. Securing affordable policies can require careful shopping around.
- Lingering Defects – No matter how well repairs are done, severely damaged vehicles may continue exhibiting mechanical or safety issues. Poor driving characteristics often persist.
- Unknown Problems – With branded title cars, you gamble on a vehicle history that may contain troublesome incidents in its past you aren’t yet aware of that could later require pricey fixes.
Tips for Purchasing Branded Title Cars
If you’re considering a branded title car, follow these steps to minimize risk:
- Get a detailed vehicle history report to understand the specifics of the title brand
- Have a trusted mechanic perform a thorough inspection for any unresolved issues
- If possible, obtain the original repair estimates and documentation
- Check with your insurance provider about coverage and premiums for the specific vehicle
- Factor in the potential challenges of future resale when determining your budget
- Be prepared for the possibility of unexpected repairs or diminished performance
My Final Thoughts and Recommendations
Branded Title Vehicles can offer significant savings and put you in a newer car that might usually be out of your budget, but they also come with great risk.
If you think it’s worth the risks, please have the car inspected before hand to minimize those risks as much as possible.
