You’re looking through the used car adverts online and come across a car that looks too good to be true at a very low price. However, you notice in the seller’s comments that it has a ‘branded’, ‘rebuilt’ or ‘salvage’ title. So what exactly are they?
Well, a ‘Branded’ title is actually an umbrella term given to a vehicle that has been involved in some sort of accident, whether from a major collision or anything that results in the car being unsafe to drive and needing more money poured into fixing it than it’s worth in some cases. It can also be from a car having had its odometer illegally rolled back and fraudulently sold with a lower, false reading. Therefore, if the car has been significantly compromised in any way, then a state agency will issue a ‘Branded’ title linked to the cars unique ‘vehicle identification number’ (VIN). This cannot be done by a private party.
So let’s take a look at the different types of ‘Branded’ titles you may come across.
1. Salvage Title
If the car has suffered any damage that costs more than the ‘market value’ of the car to repair, it can be issued with a ‘Salvage’ or ‘Junk’ title. This title is usually handed out in situations where an insurance company has declared a policy holder’s vehicle to be ‘totaled’, a total write-off or a total loss meaning the vehicle is not safe for use on public roads. Depending on the actual damage done, the cars structural integrity and safety may have been compromised lessening its chances of protecting you if it’s ever involved in another accident. However, having said that, if you know someone who can professionally assess the damage and if the car can be rebuilt to roadworthy condition for a fraction of the cost of getting a similar model without damage, then make sure you are armed with all information before making an informed decision.
Please note that each state has different definitions of what constitutes a ‘Salvage’ title, and such a title can be wiped out if the car moves from one state to another.
2. Rebuilt Title
This is a ‘Salvage’ vehicle listed as being a total loss by an insurance company due to heavy damage from a major accident, extensive damage from weather conditions such as hail, fire, and flooding, or damage resulting from theft. You need to have a thorough check done before purchasing any car that seems like a great bargain as some sellers won’t list the previous ‘Rebuilt’ damage. There are some telltale signs of repair which are easy to spot such as mismatched panels and paintwork, and doors, trunks, or bonnets that don’t sit in perfect alignment with the frame it sits in. But there are also many hidden areas you can’t check such as stability control, airbags, anti-lock systems, or driver-assist systems in newer cars. It is therefore crucial to get an inspection by a collision-repair expert and/or qualified mechanic if you are thinking of purchasing a “rebuilt’ vehicle.
While an auto body repair company can straighten a vehicle chassis/frame, replace damaged car parts, and spruce it up with a paint job, they could miss damage done to the suspension, steering, or drive-train. Any test drive should reveal how smooth a car drives, and if you do a sharp U-turn and feel the steering pulls or grinds, then there is likely to be damage that needs attention.
Always ask the seller questions in relation to the ‘Rebuilt’ title like
‘What type of damage was done?’
‘How bad was it?’
‘Who rebuilt the car?’
‘Have you got the paperwork to show what was repaired and replaced?’
‘Have you got the roadworthy condition report after it was repaired?’
Any warranty that existed will be void after a car is listed as ‘Salvage’ or ‘Rebuilt’. It is also difficult to insure a ‘Rebuilt’ vehicle as insurance companies don’t have any idea how sufficient the repair job was in making the car structurally sound and truly safe to drive again.
At most you will only get ‘Liability’ insurance (which covers other people’s cars and property, but not your own) from some insurers. So you need to consider this when buying a ‘Rebuilt’ vehicle.
3. Hail Damage Title
Since 2015, an average of 40% of insurance claims have attributed to hail or wind storm damage. Unfortunately not all states have this title (such as Texas), so check whether your state does.
Hail damage usually affects the exterior of the car body from above (although depending on the angle of the wind, it can affect the sides as well). However, the extent to which a car is covered in hail damage can vary. You may get a bargain on a “Hail Damage’ titled vehicle, and while the engine bay maybe safe, the structural integrity of the roof and external frame may not. Some insurance companies won’t issue comprehensive insurance on hail affected cars. Once hail damage has been reported to an insurance company or a state department of motor vehicles, it will show up on a ‘Vehicle History Report’.
4. Water Damage Title
This is often caused by natural disaster flooding (although burst water pipes and off-road rivers can also be attributed). Causing devastating damage to the cars’ engine and interior areas, along with unsightly mold and mildew, floods can also move the car and cause further structural damage as it hits trees, homes, and various floating debris.
Often flood-damaged cars will be moved interstate to find buyers, so even if you think there won’t be any on the used car market in your state where there’s low or no flood prone weather, think again. There are some checks you can do yourself such as noticing a musty odor in the interior of the main cabin or in the trunk (which is common as it’s a small space), damp carpets or carpets that have stains or are loose, or perhaps the carpets have been replaced. Search out rust around door or window frames or inside the hood or trunk hinges and latches, or small bubbles/blisters affecting the paintwork (these can hide rust spots underneath). Also check for mud or silt deposits in the trunk around the tire bay, in carpets or under the seats. The tire bay is an ideal spot for trapped water or signs of rust. Moisture beads can form in interior lights and external head or brake lights, so look at these also. When you turn on the ignition, make sure all instrument panel lights illuminate. Check all electrics like power windows, all switches and dials work for the stereo, and the heater/aircon works as it should. Push your hand down into the seats and really get a sense of any dampness or moisture on your hands. If you have a friend or family member who is sensitive to smells, take them along to have good sniff.
There are a lot of cheap cars under $3,000 on the used car market with extensive rust around the wheel arches and doors, and really these vehicles should be avoided at all cost.
5. Odometer Rollback Title
Illegal is the word that comes to mind. A car that has had its odometer rolled back has usually done huge mileage, but the seller wants to cash in on a higher price. What you as the potential buyer doesn’t know is how all these miles have affected the engine, the suspension, and the body overall. This applies to the wear and tear on wheel rims and tires, brakes, seats, muffler, and light fittings to name a few. Sure a new set of tires can hide wear and tear on the tire itself, but not on the axle or suspension. You can obtain a free Odometer Fraud Check if one exists on the car you are looking at, but they aren’t always available if it’s been hidden.
6. Lemon Title
Most states will have a ‘Lemon Law’ which allows buyers of new cars to return them due to them being excessively defective and unsafe to drive. This law varies once again from state to state. How does this then affect a used car buyer? Well these poorly made vehicles end up on the used car market However, a whopping two-thirds of states in America don’t require any ‘Branding Title’ for these lemons. So checking the history and maintenance records thoroughly for extensive repairs done just after ‘new’ purchase, or multiple repairs done for one problem, or even that the original manufacturer has owned the car after the first owner, these can be red flags for a lemon vehicle costing you a lot in the future.
7. Title Washing
Often if a car is being sold in a different state (usually by a dealer), it is because that state has different rules about certain types of ‘Brand’ title which in turn can mean a car can be wiped of its previous title. Whether they deliberately leave out the previous condition or work to erase the cars history, this is called ‘Title Washing’.
There are some dodgy dealers and private sellers out there who won’t put down whether a car has a ‘Branded’ title or not in the advert, so it’s essential to get a ‘Vehicle History Report’ from Carfax or any other accredited agency that can check for you. Always look in which states the car has been registered in, as any previous records from other states may reveal more than you thought.