What Is a Branded Title? What It Means, Types, and Risks 

A branded title is a label on a vehicle's title issued by a state agency. It shows that the car has been badly damaged and may have been totaled in the past. Vehicles with branded titles usually cost less than those with clean titles. Buying a car with a branded title can save you money, but it comes with risks. You may face more serious mechanical problems with these types of vehicles. Additionally, getting insurance for branded cars is more complicated, and if you sell one later, you might receive much less money. This article explains what a branded title is, how it affects a vehicle's value, and the risks of buying a car with a branded title.

What Is a Branded Title?

A branded title is a label on a vehicle's title that shows the car has been badly damaged or has other serious issues. This label is usually issued by the state agency that handles vehicle registration. Unlike a clean title, which means a vehicle has not suffered significant damage, a branded title informs buyers about a car's history. It helps buyers avoid purchasing cars that could be unsafe or unreliable.

While vehicles with branded titles are generally less expensive than those with clean titles, they can expose buyers to serious financial and legal liabilities. Driving a car lacking structural integrity or safety features can be risky. Additionally, vehicles with branded titles are difficult to insure and tend to have lower resale values than those with clean titles.

What Does a Branded Title Look Like

State agencies make title brands that usually appear on each vehicle's title. How a branded title looks typically varies by state. However, in most states, title brands are boldly captioned in all caps from one end to another on a vehicle's title certificate. Alternatively, some states include a box titled vehicle history on each vehicle's title certificate where a title brand is added. If the car has been involved in events that affect its condition, an appropriate title brand will be written in the box and vice versa. Most states use red ink to indicate a vehicle's title for visibility, while some use yellow.

How Does a Vehicle Get a Branded Title?

Title brands reveal specific conditions or events in a vehicle's history. As such, title brands are made to warn and inform consumers about cars that have been damaged or deemed unsafe for use. Additionally, title brands are also made to deter the sale of damaged vehicles in a state, ensuring that only roadworthy cars with clean titles and roadworthy are driven on the highways.

Types of Branded Titles

Each state in the federation has different title brands it uses to inform the public about specific conditions and events in a vehicle's history. Listed below are common title brands used by most states:

• Damaged: This indicates that a vehicle has suffered significant damage to the extent that the condition of the vehicle is required to be disclosed by law. Buying a car with this title exposes you to risks. Firstly, there is a chance that the car has not been adequately repaired, and secondly, there is always a possibility that the vehicle will never be returned to good condition.
• Prior Taxi: This indicates that the vehicle was initially used for Taxi. These vehicles usually have a higher mileage compared to others.
• Prior Police: This indicates that a law enforcement agency initially used the vehicle. Such vehicles also have high mileage.
• Remanufactured: This indicates that a manufacturer reconstructed the vehicle with reconditioned or used parts. These vehicles are usually sold under a distinctive trade name.
• Gray Market: This means that the vehicle was initially manufactured outside the United States but has been converted to meet federal safety emissions standards. These vehicles do not have warranties or after-sales support.
• Totaled: This means that the vehicle has been declared a total loss by the state or the insurance company that is intended to cover the loss. This designation is used when an insurance company deems a vehicle damaged, but the state does not salvage it. The cost of parts and labor to repair these vehicles usually exceeds their value.
• Salvage: This indicates that the vehicle was involved in an accident or has incurred significant damage due to flood, vandalism, fire, or theft. These vehicles are usually costly to fix.
• Owner Retained: This means that a vehicle has been declared a total loss by an insurance company, but the vehicle owner still retains ownership of the car. These vehicles are no longer covered by insurance and are usually costly to repair.
• Recovered Theft: This indicates that the vehicle, which was previously titled salvage, has been repaired and inspected.
• Exempt Odometer: This indicates that the vehicle falls under a category that can be sold without odometer disclosure. These types of cars expose you to odometer fraud.
• Antique: This means that the vehicle is over 50 years old. These vehicles are usually not roadworthy.

What Are the Risks of Buying a Branded Title Car?

Vehicles with title brands are usually purchased at a bargain. However, they may expose you to serious financial liabilities in the long run. As such, understanding the risks associated with buying a vehicle with title brands before making a purchase is always in your best interest. Discussed below are some of the risks related to branded vehicles:

• Insurance: Most insurance companies do not cover vehicles with title brands, and since you cannot drive a vehicle that is not insured in most states, you are at risk of purchasing a vehicle you cannot use legally.
• Structural/Mechanical Problems: Most vehicles with title brands may never return to their initial condition. Buying these vehicles may expose you to a series of costly repairs.
• Resale Value: Buyers are often skeptical about vehicles with branded titles. This may reduce your chance of selling the vehicle at a reasonable price.
• Auto loan: Most money lenders do not finance vehicles with title brands. As such, you may find securing a loan to purchase the vehicle difficult.
• Safety: Many vehicles with title brands like salvage, rebuilt, or flood titles can have serious safety problems. These issues may come from past accidents, major repairs, or damage from hazardous conditions. Such factors can weaken the vehicle's structure and make it less reliable.

Pros and Cons of Branded Title Cars

Buying a car with title brands has its pros and cons:

• Pros
  • Cars with branded titles cost less than cars with clean titles
  • Many vehicles with a branded title require only minor repairs
• Cons
  • Cars with branded titles may have hidden significant damage if they are not repaired properly
  • Insurance companies often reject these vehicles 
  • Vehicles with title brands have less resale value 
  • There is usually no warranty

Can You Insure a Car With a Branded Title?

One of the problems with purchasing a car with a branded title is getting insurance coverage for it. Insurance companies are exposed to more risk when covering vehicles with branded titles, making the insurance rates for these vehicles higher than usual.

While many insurance companies do not offer coverage plans for vehicles with branded titles, some require the individual to provide the vehicle's history and a certified mechanic's statement showing that the car has been inspected. Most companies will insure vehicles with rebuilt titles, but only a few consider insuring salvage vehicles. As such, you will likely contact several insurance companies before getting insurance for your title brand.

Can You Remove a Branded Title?

Title brands cannot be removed. This is to ensure that consumers are aware of the condition of a vehicle before making a purchase. However, some title brands can be replaced with another brand following adequate vehicle repair and satisfactory inspection. Each state's Department of Motor Vehicle outlines the rules for replacing title brands. For example, while you can replace specific title brands in South Carolina, once your vehicle is declared salvage, you cannot change or remove the title brand.

In Wyoming, you can change a salvage title to a rebuilt title. To do this, apply for a rebuilt title and include the original salvage title certificate. Once the DMV receives your application, it will give you instructions on what to do next. You will need to have a state law enforcement officer inspect your vehicle. After you pass the inspection, your vehicle's title will be updated.

How To Check If a Car Has a Branded Title

There are several ways to check a vehicle's title. You may contact your state's DMV by telephone or use their VIN lookup system to check if a car has a branded title. Alternatively, you can use the National Highway Traffic Safety Administration VIN Decoder to confirm a vehicle's title brand. This tool delivers crucial safety information regarding the vehicle, including safety ratings and any associated recalls. You are required to input either a complete or partial VIN to conduct the inquiry.

You may also use the National Insurance Crime Bureau VINCheck, which assists users in verifying whether a vehicle has been reported as stolen or categorized as salvaged. To utilize this service, you must provide the vehicle's complete VIN. Users are permitted to conduct a maximum of five searches each day.

FAQ About Branded Titles

Discussed below are some frequently asked questions about branded titles.

How Much Does a Branded Title Affect a Car's Value?

Branded vehicles may cost up to 40% less than vehicles with clean titles. These vehicles are usually sold without warranties, and the chances that the new owner will make repairs are high.

Does a Branded Title Affect Insurance?

Vehicles with branded titles usually lead to higher costs for insurance companies than those with clean titles. As such, many insurers either do not provide coverage for branded title vehicles or charge higher rates for these policies.

What's the Difference Between a Branded Title and a Rebuilt Title?

A branded title and a rebuilt title are not the same. A rebuilt title means that a vehicle, which was previously salvaged, has passed inspection and meets safety standards, making it safe for the road.

Are Branded Titles the Same in Every State?

Title brands vary by state. Each state has a set of title brands, and even similar titles may vary slightly in each state.