Before signing off on the title to a bad credit car you need to know what a branded title is to avoid buying a vehicle that has one
Practically all lenders will not finance a vehicle with a branded title, but it can also hurt you if you plan on buying a used car with a problem credit auto loan .
We have seen a number of applicants with car title issues in our two decades of involvement with bad credit car sales here at Auto Credit Express.
We even created a web site so that applicants can learn about issues such as tote the note dealers and horrible credit auto loans as well as today’s topic, branded titles.
The majority of used cars have a clean title. This is the case even If the vehicle was in an accident – just as long as it wasn’t bad enough to declare it a total loss (which means even with a clean title you should ask for a vehicle history report and have the car inspected, since there might be hidden accident damage).
But if a car has been in an accident with enough damage to declare it a total loss, once repaired it’s issued a “branded title”.
Branded titles are also issued for other situations.
Title brands can vary by state but usually include the following:
Rebuilt – A vehicle previously branded as “salvage” that has been repaired and inspected. These vehicles might be drivable, but a rebuilt title means it was, at one time, a salvage vehicle. Bad credit auto loans cannot be used to finance a car with a rebuilt title brand.
Salvage – A vehicle with damage that would typically cost between 75% and 100% of its value to be repaired. In some states, the rebuilt brand does not exist and salvage vehicles that have been repaired still carry a salvage brand. Bad credit lenders will not finance salvage branded vehicles.
Junk – a vehicle that can only be sold for scrap or used for parts
Flood Damaged – A vehicle that has been water damaged. In some states a flood damaged vehicle might also be labeled with either a salvage or brand. Vehicles classified as flood damaged cannot be financed with no credit auto loans.
Although typically not a brand, most states require any vehicle used as a taxi, a daily rental or for police use be designated as a fleet vehicle. Bad credit lenders will not finance a fleet vehicle.
Mileage unknown – Mileage unknown is not a brand, but most states require that the title be notated if vehicle mileage is unknown due to odometer replacement or other issues. Bad credit lenders will not finance these vehicles.
Like fleet, a stolen vehicle is usually not a brand, although many states may refuse to title a recovered stolen vehicle. Due to the damage they sustain, many of these vehicles are branded so that they cannot be re-sold.
Vehicles with branded titles typically have either a different-colored title with a notation on it or a notation at the bottom of a regular title to set it apart from a clean title.
During the practice of “title washing,” a vehicle with a branded title is purchased in one state and then re-titled in another state resulting in a clean title. In many instances, a vehicle history report and car inspection can reveal the fact that a car has had its title “washed”.
Failure to thoroughly research a vehicle’s history can be a problem because many states now run title applications through a national VIN database before issuing the new owner (you) a title, making it difficult to both license and insure this kind of vehicle.
Be especially careful when signing the title to a used car. Your best chance to avoid buying one is to run a vehicle history report and have it thoroughly inspected by a certified master mechanic prior to signing any paperwork.
At Auto Credit Express we can help you find a dealer for your best chance at an approval for a bad credit car.
So if you’re serious about getting your car credit back on track, you can begin the process now by filling out our online car loans bad credit application .
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