A title is a critical document during the car purchasing process. It tracks ownership and gives potential buyers important information about the vehicle’s history. This document includes the unique Vehicle Identification Number (VIN); the make, model, and year; an odometer reading taken when the title is issued; and the owner’s name and contact information¹. 

When buying cars at auction, dealers and their employees may encounter a variety of car title types, and it’s important that all parties involved know what they’re getting into. Familiarizing yourself with the different types of titles can save your business time and money when purchasing used vehicles. This guide is designed to help you and your employees know what each car title type means.

Clean Titles

What Is a Clean Title?

Clean titles are the most common car title type, and they’re the most convenient and hassle-free. A clean title, also called a clear title, indicates that the vehicle in question is not subject to any liens or other financing plans. It also lets the buyer know that the vehicle hasn’t sustained any major damage that would significantly impact its salability or value. 

Cars with clean titles may still have been involved in one or more car accidents throughout their lifetimes, usually resulting in minor damage. A title only becomes branded if an accident is major enough to cost more than 60% to 75% of the vehicle’s value in repairs¹. 

Salvage Titles

What Is a Salvage Title?

When a car has been in a significant accident, it’s often branded with a salvage title. Cars with a salvage title are colloquially referred to as “totaled.” The type of damage associated with a salvage title includes widespread or critical structural damage and damage that the insurance company deems is too expensive to justify repairs.

In most cases, a salvage title is a permanent brand, which can make insuring such a vehicle or registering it in a new state difficult. These vehicles can still be approved for road use, but it might take a special inspection and significant repairs to do so².

How to Get a Salvage Title Cleared

There is no true way to remove a salvage title from a vehicle once it’s been issued. However, there are ways to clear the title and mitigate some of the negative effects a salvage title can have on your ability to sell a vehicle. The easiest (though still difficult) way to accomplish this is to put in serious work on the car, submit it for inspection, and apply for a rebuilt title. This title rebrand indicates that the vehicle has seen enough repair work to consider it safe and no longer impacted by the damage that caused the original salvage title brand³. 

Other Car Title Types

There are a few other title types that may be issued under specific circumstances. These include: 

• Junk titles: When sold to a salvage yard, a vehicle may incur a junk title brand, indicating that it is intended only to be junked or used for parts.
• Bonded titles: In some cases, it’s impossible to determine the previous owner of a vehicle, leading to a bonded title to cover future claims of ownership.
• Lienholder titles: When a buyer finances a vehicle, they may not receive the title directly. Instead, a lienholder title may be sent to the financing institution to be held until the vehicle is paid off⁴. 

How ACV Auctions Displays Title Information

At ACV Auctions, it’s important to us that buyers have as much information as possible before committing to a purchase. That’s why we make each car’s title as transparent as possible. Our auction platform collects all relevant information into one Title & History section so buyers can view critical information in one place. This includes the presence of the title, any applicable brands, the presence of flood damage, mileage information, and more.

Transparent Reporting to Empower Buyers

We know how important it is to make smart choices for your business, especially when choosing inventory. Our dealership auction platform tells you everything you need to know about each vehicle, so you know what to expect before bidding. Sign up today to get started.  

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Sources:

1. Car Titles Explained. CarMax. Retrieved December 29, 2022, from https://www.carmax.com/articles/car-titles-explained

2. What Are the Different Car Title Types? CarTitles.com Retrieved December 29, 2022, from https://cartitles.com/different-types-of-car-titles/

3. Kobayashi, H (6 December 2022). How to Get a Salvage Title Cleared on Your Vehicle. Jerry. Retrieved December 29, 2022, from https://www.carmax.com/articles/car-titles-explained

4. Hearst Autos Research (11 June 2020). Types of Car Titles: Everything You Need to Know. Car and Driver. Retrieved December 29, 2022, from https://www.caranddriver.com/research/a32811335/types-of-car-titles/

5. Clean Title Car Auctions. ACV Auctions. Retrieved December 29, 2022, from https://www.acvauctions.com/clean-title-auctions

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