A vehicle’s title is a vital document that designates ownership. It’s transferred when a vehicle is sold and used during the registration and insurance processes. Car titles have information about the vehicle such as its Vehicle Identification Number (VIN), make and model, and owner’s information. In short, it’s an important document worth understanding and keeping in a secure place¹.

Branded titles are also titles, but they have special designations that signify previous incidents the vehicle has been in. Cars with branded titles have been damaged, totaled, or negatively altered in the past, such as through a fire, flood, or accident. Because of this, cars with branded titles are typically less expensive than those with clean titles. The tradeoff is that the damage could make a vehicle less safe to drive, or more likely to fail sooner². This type of “good news, bad news” situation can be consuming, so use the guide below to get a better understanding of branded car titles.

Types of Branded Titles

Branded titles differ from state to state, but there are some general types you can expect to see.

Odometer Rollback Title

A vehicle’s odometer provides an important record of a vehicle’s time on the road and potential wear and tear, which can affect its value. Rolling back this number is not legal, but it can happen. If this is detected, a vehicle can be issued an odometer rollback or altered odometer title³.

Water Damage Title

Water damage titles are self-explanatory. Vehicles with this designation have been impacted by water-related incidents, such as flooding after a severe storm or hurricane, or heavy rain while on a flood plain. Water damage is often detrimental to a vehicle, rusting and corroding mechanical components and destroying the interior².

Rebuilt Title

Rebuilt titles are issued to vehicles that have been repaired and inspected after being totaled. An insurance company will declare a complete loss if the cost of repairs is above the vehicle’s value. These vehicles can be fixed and inspected to make sure they pass state safety guidelines before getting such a title. A standard rebuilt title signifies that the vehicle incurred expensive damage in the past³.

Salvage titles are issued if a vehicle has incurred damage whose cost of repair is 50% or more of the vehicle’s value. Salvaged titles can become Rebuilt Salvage titles if repaired⁴.

Lemon Title

Many states have lemon laws, which compensate car buyers for products that repeatedly fail to meet quality and safety standards. These standards vary by state, and states can apply a lemon title to a vehicle if it has significant issues that fit their guidelines while under warranty. In some cases, manufacturers may be able to resolve existing issues before a lemon title is issued. If you encounter a vehicle with a lemon title, it’s vital to understand the laws of the issuing state to get the full picture⁴.

The Pros & Cons of Using Branded Title Cars

Should you buy a car with a branded title? It depends—not every aspect of branded titles is negative. Cost savings are a major benefit. Vehicles with branded titles are significantly less expensive due to their undesirable history. If a vehicle has been repaired and inspected so it meets the standard, the branded title may be a way to add it to your inventory at a much better cost than normal.

Additionally, branded titles may be issued for damage across a spectrum. In some cases, a vehicle may have experienced extensive flood damage. In others, it may have had physical body damage that was very expensive to repair but didn’t affect the safety of the vehicle. The challenge is determining why the branded title was issued. 

The main downside of a branded vehicle is that it could have significant underlying damage. Superficial repairs could mask other issues that are still present in the vehicle and can cause problems in the future. Additionally, it can be difficult to insure or finance a vehicle with a branded title because of its perceived problems. Lastly, selling a vehicle with a branded title can be challenging because customers can view this status as a red flag, shrinking the pool of potential customers.

Your sales team needs to know the ins and outs of branded titles to provide accurate information about a vehicle’s history and condition and clear up any misconceptions. In the end, the right buyer will be happy to drive it off the lot.

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Branded titles can be confusing, but ACV Auctions provides clarity with detailed reporting on every vehicle, including it’s title status and a dedicated department to obtain and transfer titles for your dealership. ACV Auctions is the go-to marketplace for savvy dealerships looking to stock up on quality vehicles. Register today to browse listings and start bidding on the cars your customers are looking for.

Sources:

1. What is a Car Title? Progressive. Retrieved on July 30, 2023, from https://www.progressive.com/answers/what-is-car-title/
2. Wilson, J. (11 May 2023). What Is a Branded Title? VinGurus. Retrieved on July 30, 2023, from https://vingurus.com/blog/vingurus-latest-posts/branded-title
3. Tretina, K. (11 August 2022). What Is a Branded Title? What It Means, Types, and Risks. Investopedia. Retrieved on July 30, 2023, from https://www.investopedia.com/what-is-a-branded-title-5185427
4. Automotive Title Brands. AutoCheck. Retrieved on July 30, 2023, from https://www.autocheck.com/vehiclehistory/title-brands
5. Pros and Cons of Buying a Branded Title Car. Autolocity. Retrieved on July 30, 2023, from https://www.autolocitymotors.com/blog/2020/july/6/pros-and-cons-of-buying-a-branded-title-car.htm