Posted: Tuesday, October 29th, 2019
During your search for a reliable used car, you may come across a vehicle with a branded title. What is a branded title? It’s a permanent title applied to vehicles that were declared a loss by an insurance company due to extensive damage. The department of motor vehicles gives the car a branded title so its status is apparent to car shoppers. Vehicles with branded titles can be great deals, but you may not be able to finance, insure, sell, or — in some cases — drive it. Not to mention, you won’t get the peace of mind of a non-branded title.
What are the Types of Branded Titles?
Branded car titles vary from state to state, but some of the most common include the following:
- Lemon: A car is branded a “lemon” if a car buyer experiences a severe problem with it while it’s still under warranty, and it remains inoperable even after the manufacturer has had the opportunity to repair it. Check the title and vehicle history report of the car you’re considering for this brand.
- Salvage: What’s the difference between a branded title vs. salvage title? A salvage title is a type of branded title. An insurance company will likely give a car a salvage branded title if it’s been involved in an accident and the repair costs are greater than 80% of its fair market value, i.e. a total loss.
- Water Damage: Water can damage virtually all aspects of a car, such as the engine, interior, and electronics. If a vehicle is flooded with water for longer than two days, it’s branded as water damaged and a total loss.
- Hail Damage: St. Louis and other parts of Missouri are subject to hailstorms, which can cause severe cosmetic damage to a vehicle. This often results in the insurance company declaring it a total loss.
- Odometer Rollback: Used cars with lower mileage are usually more desirable to car shoppers. So, it’s not uncommon for shady sellers to tamper with the odometer reading. If odometer rollback is detected and proven, the car’s title and vehicle history report will be branded.
Can I Buy a Car With a Salvage Title?
You can — and for a cheap price, but with one major drawback: you won’t be able to legally drive it on public roads. In Missouri, a car with a salvage title can’t be registered
again until it’s rebuilt, passes inspection, and is documented by the state. That being said, the process of restoring a car with a salvage title is long, arduous, and often expensive. Even if you’re able to rebuild the car and repair the damage, as mentioned above, the brand will remain on the car’s title for the rest of its life. Additionally, if you decide to sell it in the future, its resale value will be slashed by about one-half to two-thirds.
Things to Keep in Mind When Buying a Branded Title Car
If you’re strongly considering buying a branded title car, keep the following tips in mind:
- Stick to Body Damage: If you’re buying a salvage car, stick to car with simple body damage. If the car’s frame, for example, is dented, it doesn’t matter how much restoration work you do; the car’s safety is likely compromised and it should be avoided.
- Don’t Count on Easy Registration: In order to get the car registered, it’ll need to be rebuilt and inspected, either by a police officer or a repair shop, to be registered and deemed safe to drive on public roads. Make sure you’re in it for the long haul.
- Get a Pre-Purchase Inspection: Chances are the seller won’t list every little ding or bit of wear and tear. Get the car inspected and see if you can get a reduced price based on the results of the inspection. If the seller won’t budge, it’s probably best not to waste any further time. A salvage model’s is worth only about 60% of a non-salvage car’s value (of the same make and model), but only if it’s fully reconstructed.
Are Branded Title Cars Bad?
Branded title cars aren’t inherently bad; it depends on the title and the damage involved. In most cases, though, it’s best to look elsewhere for a cheap used car with a clean record. The largest benefit to buying a branded title car is, of course, the low price tag. The drawbacks, however, outweigh the affordable cost:
- Safety: Compromised safety is the most obvious drawback. Even if you get a branded title car inspected before buying it, you can never be 100% sure what’s wrong or will go wrong with it until you take it out on the road. Again, you can’t do this until it’s reconditioned and passess a full inspection.
- Difficulty Get Insurance & Financing: What does a branded title mean for insurance coverage and financing? Insurance-wise, the best you can hope for is limited coverage. Some insurers offer zero coverage for branded title cars. Lenders see them as massive risks and generally won’t offer financing for them.
- No Resale Value: Should you decide you want to trade-in a car with a salvage title or a branded title — you usually can’t. Dealerships don’t accept them and they can’t be accurately priced based on true market values using Edmunds or Kelley Blue Book.
Get More Tips for Smart Used Car Shopping From Green Light Auto Credit!
To summarize: Are branded titles bad? While it’s possible to find a branded title car for cheap, the associated risks and costs you’ll need to cover to make it drivable, plus the lack of available insurance and financing, make them less than desirable. Green Light Auto Credit is your source for hassle-free car financing, regardless of whether you have good credit, bad credit, or no credit. We can help you get a dependable used car for rates and terms that work for you. Contact us today to learn more about what to lookout for while you car shop, such as branded titles and open liens. See why drivers from St. Charles to Florissant and beyond rely on us!
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