What is a branded title? Meaning, types of title brands, and the risks

If you’ve shopped for a used car, pickup truck or SUV, one of the things sellers often hype up the most is the title status. “Clean title” cars are the gems that everyone wants, but there are plenty of other options that bring some risk in exchange for a lower purchase price. Used vehicles with branded titles often sell for thousands less than their clean-titled counterparts, but reading the Carfax report doesn’t always reveal the story behind the used car branded title, nor does it explain what each brand actually means.

What is a Branded Car Title?

You can think of a branded title as one that has been “stamped” with a notification that something has happened to the car. Branded titles often come from insurance companies’ willingness to pay for repairs after a serious crash. If the damage is severe enough, the insurer will declare a total loss, meaning the vehicle’s repairs will cost more than the car’s value. You might also see vehicles with salvage or rebuilt titles, which are also considered brands.

What is a Clean Title?

A clean title means a car has not been in a (recorded) serious accident or collision, has not been stolen, is not a lemon-law buyback, and can be registered and insured normally. That does not mean the vehicle will be problem-free, nor does it mean there hasn’t been damage that occurred “off the record.” It’s possible for a car to be repaired without ending up with a branded title, so it’s still a good idea to get a thorough pre-purchase inspection.

Can You Remove a Branded Title?

It is not legal to alter a car's title in an effort to remove a brand. Once a brand has been made to a title, it will follow the vehicle for the remainder of its life. It is possible, however, to change a Salvage Title to a Rebuilt Title by having the vehicle repaired and inspected.

What is Title Washing?

One issue to be aware of when shopping for a used car is that each state issues its own vehicle titles, and not every state follows the same title branding procedures. Sometimes, it's possible to sell a vehicle across state lines in an effort to "wash" its title from a branding. It is illegal to attempt title washing. If you are looking at buying a used car or truck from another state, it's especially important to have a full title check completed as part of a vehicle history report and to consider paying for a pre-purchase inspection.

Types of Title Brands You Should Know About

Salvage Title

You may have heard the term “totaled,” which indicates that a car has been in a wreck and requires repairs with costs that exceed its value. Insurance companies don’t want to pay for the repairs if the resulting vehicle won’t be worth the cost and will deem the vehicle a total loss. This is different from cars with rebuilt titles, though, so it’s important to note that salvage titles do not indicate that repairs have been performed. Cars with salvage titles can’t be registered or driven until they’ve been returned to a roadworthy state. It’s also important to note that states have different rules for salvage titles, so the definition can differ from one place to the next.

Rebuilt Title

Once a vehicle has received a salvage title, it can return to the road, but only after it has been repaired. Rebuilt cars can be registered and insured, and some banks offer loans for them, but their value is severely impacted by the brand. Of course, you’ll need to make sure that the repairs have been done the right way to prevent any surprises down the road.

Lemon Law Buyback Title

A lemon is a car that has had multiple attempts to repair a problem without resolution. Depending on the state, it might have met conditions, including a certain number of days in the shop or repair attempts. If a car qualifies as a lemon, automakers may buy it back, but their story doesn’t end there. Lemon law vehicles can end up on sale again, even at franchise dealerships. Assuming the problem has been fixed, lemon law cars can be great options to save a few bucks, but, like rebuilt titles, they impact the vehicle’s value. You may also need to search for a lender willing to offer a loan and an insurer to cover it. It’s also important to note that reselling a car with a lemon law buyback on the title might take some time.

Odometer Rollback

Everyone wants a car with low mileage. The shorter the distance a vehicle has been driven, the less of a chance there is that it has accumulated wear and tear that could lead to costly repairs. Though modern cars’ computers and digital displays make it exceedingly difficult to tamper with mileage, it’s still possible and can lead to severe consequences for buyers and sellers. Luckily, there are ways to detect the tampering, again leading us back to recommending a thorough pre-purchase inspection before buying a used car.

Other Types of Brands

While those are some of the most common types of brands, they are not the only kinds you might see. Flood damage, hail damage, and other scenarios could lead to title brands. The best thing to do if you’re facing any type of branded title is to do your homework and have the vehicle inspected. Even the least serious-sounding brand can cause issues for you down the road.

Should You Buy a Vehicle with a Branded Title?

This, like most things in life, depends. If you’re looking to save a few dollars on your purchase, you should remember that other parts of the ownership experience may be more expensive, including your interest and insurance rates. You’ll also face lower values if you decide to sell the vehicle down the road. Branded-title vehicles make great projects and candidates for engine swaps and all sorts of modifications, but they shouldn’t be viewed as investments, even if they’re rare. That said, a branded title might make your dream car more attainable, but get a pre-purchase inspection to make sure you know what you’re getting into.