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Here’s What You Need to Know When Buying a Car With a Branded Title

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Last updated on July 22, 2020

Individuals who are wallet-conscious opt for the salvage-title cars when they’re unable to splurge on a brand new vehicle. The used auto market is flooded with several branded title vehicles. Because of this influx of branded-title vehicles, it's crucial to maintain a sense of caution, so you don’t purchase the wrong car from the wrong vendor. 

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Before you dive headfirst into the car-buying process, you should conduct your own research. This post explains everything you need to know about branded vehicles, so you can purchase with confidence from a reputable salvage yard like Tear-a-Part.

What's a branded title automobile?

When an insurance company renders an automobile a branded-title vehicle, said vehicle has been evaluated to require repairs that are more costly than their resale value. Cars with branded titles are pronounced a branded-title vehicle by an insurance firm in accordance with your state's provisions. This often happens when the auto's repairs exceed the pre-accident value by between 50 and 90 percent. In cases of a branded title, an insurer financially compensates the vehicle owner and takes possession of the vehicle's title.

Many factors contribute to a salvage title, and they may include flood damage, damage related to a car crash, hail damage, and smoke damage, among other sources of interior and/or exterior wear-and-tear. 

Types of branded titles

Odometer rollback

Prospective buyers typically prefer used vehicles with minimal mileage. A moderate to low odometer reading is an incentive for any potential buyer. If one physically detects and acquires proof of odometer rollback, the car's history report and title are both branded.

Salvage

Salvage titles are forms of branded titles. The insurer may award a salvage title to a vehicle after it's involved in a crash, and the repair expenses are higher than 80 percent of the average market value. In cases like these, an insurer renders it a total loss.

Lemon car

A lemon car can create severe issues for the owner while under warranty and remains unsuitable for public roads after the manufacturer repairs it. Take a look at the car's title and history report before purchasing a lemon car. 

Hail damage

Areas prone to hail storms may be vulnerable to adverse cosmetic automobile damage. Consequently, the insurance firm declares it a total loss if the damage is severe enough. With hailstones that can range from pea-sized to baseball-sized, the car-in-question may have experienced a shattered windshield, sunroof, and/or indented hood. 

Water damage

Water can damage multiple components of your vehicle like any installed electronics (radios, GPS systems, etc.), your engine, and even cloth interiors. When your car is flooded for more than two days, an insurance company will total it due to prolonged exposure to potentially contaminated water.

Benefits of purchasing a branded title vehicle

One of the main perks of a branded title vehicle is its lower cost. Oftentimes, a branded-title vehicle is priced lower than other used cars of the same make, model, and/or year. Depending on the cause of the branded title, you could find cars priced 40 percent lower than other vehicles with clean titles. If you’re also searching for spare parts to repair your existing car, branded title vehicles are a great option.

Insurance companies total vehicles when they estimate that the repair costs surpass the vehicle's value. This doesn't mean the car is irreparable. An insurance company may not investigate the automobile damage thoroughly enough, and a potential vehicle owner could be able to identify cost-effective options to recover the vehicle.

Things to consider when purchasing branded title vehicles

Body damage

When buying a salvage title car, scope out the vehicle for scrapes, scratches, visible dents, etc. Then, assess the type of body damage. For instance, if the frame is dented, it’ll compromise the vehicle's safety. If the body damage interferes with a car’s safety, then you’ll want to avoid these safety-comprised automobiles during your car-buying experience.

Keep in mind, it’ll also take time for you to register the car for public road-use again. You’ll have to rebuild the vehicle, and the repair shop or police officer will have to inspect it, so be patient.

Ensure that you also perform your own inspection before purchasing. Most sellers may not report all details regarding existing wear-and-tear. Depending on the inspection reports, you can request a price reduction. Note that a salvage vehicle is worth around 60 percent of the non-salvaged car’s value.

Cons of branded title vehicles

When a car gets a branded title, the title sticks forever. However, in some states, if you restore the vehicle to working condition and earn DMV approval, it can legally operate on public roads. The branded car title will be switched to a rebuilt title status. A rebuilt title will, unfortunately, still yield a lower resale value even despite your best repair efforts and expenses.

Acquiring insurance for a branded title vehicle can also be arduous since you’ll have to negotiate the car's resale value with an insurer and convince the insurance representative that your car is worth what you claim. 

Determining the extent of damage when involved in a crash is yet another time-consuming obstacle related to insurance coverage. Some insurers may not award policies on rebuilt title vehicles or may even charge higher premiums. Conduct research for a suitable insurance provider in your area before making your purchase, so you can score the best deal possible.

How to identify vehicles with branded titles

Most branded title cars have a notation that identifies them as rebuilt or salvage. Some states require branding of vehicles that acted as former police cars, weren’t manufactured or redesigned for the U.S., were a warranty return, or were remanufactured.

However, not all vehicles have branded titles, and oftentimes, unethical vendors can relocate the vehicle to different states with less stringent titling requirements, also known as title washing. 

It's crucial to review the vehicle's background report in Autocheck or Carfax before purchase. These vehicle history tools will indicate any salvage titles and the branding title's cause. You can also hire a mechanic to inspect a prospective vehicle before signing the paperwork. His/ her trained eyes will notice any repaired structures or areas of the vehicle that aren’t functioning correctly.

When buying a car with a branded title, acquire documentation that states that the vehicle is authentic. You should also crosscheck the state of the vehicle with the details of the branded car to ensure that everything matches.

1 thought on “Here’s What You Need to Know When Buying a Car With a Branded Title”

  1. Thanks for the reminder that I should also take hail damage into consideration when it comes to buying auto insurance. One of my dream is to have my own luxury car someday. Once I’m able to save up for one, I think it’s also good to find the best auto insurance policy for it in order to make sure that it’s protected well from any incident.

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