A vehicle with a branded title may seem like an impossibly good deal—but there are quite a few risks to consider before signing on the dotted line. Vehicles with branded titles have suffered extensive damages of some kind.

So you’re shopping for the perfect used vehicle and you happen across your dream car—and it’s a steal! When you check out the details, you find out it has a branded title. What does that entail exactly and is it a deal-breaker?

Here to explain all you need to know about branded titles is

Jerry

the

trustworthy car insurance shopping app

. We’ll go over the different types of branded titles, how to look for branded titles in the car-buying process, and the pros and cons of buying a car with a branded title. We'll even show you how to save on

car insurance

for a car with a branded title. Let’s get the ball rolling!

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What is a branded title?

A branded title means that the used car in question has sustained extensive damage of some kind, like suffering flood damage or being declared a total loss in a major accident. Cars with these titles have been rebuilt or repaired to be sold again—and at only 60% to 80% of the Kelley Blue Book fair market value compared to cars with a clean title.

Types of branded titles

Each state’s DMV handles branded titles differently, so the types of titles will vary. That being said, there are almost just as many types of branded titles as there are types of damage. Here are the most common categories:

Rebuilt title

Cars that have been involved in automotive accidents and have been declared a

total loss

can be auctioned off by insurance companies. Many times, repair shops will buy these damaged vehicles at a discounted price to fix and resell them to make a profit.

These repaired vehicles must pass a rigorous safety inspection before they’re street-legal again. If they pass inspection, the state agency will issue the vehicle a

rebuilt title

. This type of branded title informs future buyers that the car was damaged and rebuilt, giving them sufficient warning that the car’s mechanical or structural integrity had previously been compromised.

MORE:

Insuring a car with a rebuilt title, explained

Salvage title

Cars with salvage titles have also been declared a total loss following a collision. Insurance companies declare total losses when the cost of repairs exceeds the car’s value and the scrap value. The car is then given a salvage title. With proper repairs, a salvage vehicle can be re-labeled as a rebuilt car—but the rebuilt branded title will last for the car’s entire lifetime.

MORE:

How to get rid of a salvage title on your vehicle

Altered odometer/odometer rollback title

A car’s value is determined partly by its mileage, so reporting a car’s odometer reading is required when registering your car. Even so, odometer readings on used cars aren’t always accurate. Odometer fraud occurs when the odometer has been illegally tampered with to reflect fewer miles than the car has driven. In this case, the car will be given a branded title with an “altered odometer” or “odometer rollback” indication.

MORE:

What is an odometer disclosure statement?

Water damage title

Water and flood damage can create serious issues, from mold and mildew in the interior to a ruined engine. When cars have been affected by water damage in any way, they’ll get a water-damage branded title. Some cars with water damage titles may have minimal damage, while others might have been fully submerged—so be sure to look into the details for the particular car you’re considering.

MORE:

How much water damage will total a car?

Hail damage title

Average hail doesn’t exceed the size of a nickel, but when hail gets to be the size of a baseball, it can cause extensive damage to a car’s exterior. Removing hundreds of dings from a vehicle’s surface is an involved process, leading many insurance providers to brand the title rather than pay for repairs—especially if there is significant damage.

Hail damage

may often be only cosmetic, but it can decimate a car’s resale value—which could turn into a bargain for used car shoppers.

Not every state issues branded titles for hail, so be sure to check with the Department of Motor Vehicles in the state you’re buying your car from.

Lemon title

The majority of states have

lemon laws

, which allow buyers to return new cars to the dealership if they’re defective. While lemon laws outline specific qualifications for a car to be considered a lemon, different states have varying rules for these cars.

When a customer employs lemon laws to return a defective vehicle, these cars are deemed unsafe to drive, earning them a lemon title. This type of branded title will notify consumers if it’s sold as a used car in the future.

MORE:

How to check if a used car is a lemon

Pros and cons of branded titles

Branded titles may sound scary—or they may present an irresistible financial opportunity for car buyers—but it’s important to consider all the possible outcomes of your decision, for better or for worse. Purchasing a branded title vehicle comes with these possible advantages:

A more affordable purchase price than cars with clean titles

The chance of finding a branded title vehicle with only minor past damage

Branded title vehicles also come with some downsides and risks:

The chance of needing major repairs—and paying for those repair costs

Difficulty getting lenders to finance your vehicle

Complications finding an insurance company to cover you with

comprehensive coverage

Extra time inspecting and researching the vehicle’s history

Overall, the decision of whether or not to purchase a vehicle with a branded title is yours to make, but it shouldn’t be made lightly. While professionally-restored branded title vehicles are often safe and cheap alternatives to other used cars, you’ll have to decide if the benefits outweigh the (often pricey) risks.

How to find out if a car has a branded title

Unfortunately, it’s common practice for dishonest sellers to take advantage of the different state laws by trying to sell a branded title vehicle in a state where its specific branded title isn’t recognized. This is called title washing, and it could cost you big time if you aren’t careful.

The best way to avoid being swindled is by doing your research. To find out if a car has a branded title, use a vehicle identification number (VIN) checking tool. Here are the two most popular options:

VINCheck: The National Insurance Crime Bureau offers free VIN checks so you can see if a car has a salvage title or has been reported as stolen.

CARFAX: Investing in a

CARFAX Vehicle History Report

will provide you with crucial details about the car, including whether it has a branded title and why, the number of owners, and all of its maintenance records.

How to find cheap car insurance (for a car with any title)

Any type of branded title can make it hard to find affordable coverage, even for models that are usually easy to insure.

Honda Accord insurance costs

, for instance, are relatively low, but a rebuilt Accord might carry much higher premiums.

No matter what kind of title your car has, you can always count on

Jerry

to find you the most affordable policy for whatever coverage you’re looking for. As the top-rated insurance app, Jerry is ready to help you find a policy that works for your budget and your vehicle.

Jerry brings you customized quotes just 45 seconds after you sign up. Once you make your pick, Jerry’s genius agents will help you through the sign-up process so you can start saving almost immediately. Average users save more than $800 a year on coverage!

“Jerry saved me $100 a month! They canceled my current policy (even getting me a refund) and switched me to Progressive. All very simple and easy!” —Tara Y.

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FAQs

Is it ok to buy a car with a branded title?

Purchasing a car with a branded title can be risky. If you’re OK with the gamble and it goes smoothly, you could score a major deal on a car. Otherwise, a branded title vehicle could cost you more than if you bought a car with a clean title in the first place. It’s important to do your due diligence before signing the papers.

Does a branded title void the vehicle warranty?

In nearly all cases, branding the car’s title will void any factory warranty that was previously in place.

Can you remove a branded title?

No, a branded title on a vehicle is permanent and cannot be removed.

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