If you’re interested in buying or selling a used vehicle, one must-have document is the car title. The car title serves as proof of ownership of a vehicle and is usually transferred from the seller or dealer to the buyer when the sale is completed.
But that’s not all, the car title also serves as a source of information about what has happened to the vehicle in question. There are plenty of different titles that can be assigned to a car, such as whether it has suffered flood damage, junked, stolen, and many more.
When buying a used car, sellers or dealers may not tell you about a vehicle’s title brand records. What’s worse is that you cannot tell just by looking at the vehicle. Fortunately, this article shows everything you need to know about the different types of car titles, their implications, and why it’s essential to be informed before making a purchase.
Let’s get right to it.
Clean Title
A clean title signifies that a vehicle has never been branded with any negative history, like accidents, damage, or theft.
For buyers, finding a used vehicle with a clean title is like hitting the jackpot. They get to have a vehicle in good condition that has not been involved in any major incidents in the past. They can also apply for financing and insurance without any trouble.
For sellers, it enhances the vehicle’s marketability and resale value, making it more appealing to potential buyers. This is especially true if you have a car that retains its value well, like the Toyota 4Runner, Jeep Wrangler, Honda HR-V, and others.
Clear Title
A clear title is often confused with a clean title, but they are not the same. This type of title states that a vehicle has no outstanding debts of any kind that would prevent it from being sold. It means the vehicle is free of any liens or legal claims and can be sold and purchased without any encumbrances.
It is important for car buyers to pay attention to this title because if they end up with cars with liens, they will have to settle the debt from their pockets without any assistance from the seller or car dealership. This vehicle title is also the only title that makes you eligible for a car loan. So, pay close attention to spot this on your car-buying journey.
Salvage Title
A salvage title is issued to a Vehicle with a major value decrease due to an accident or theft. A vehicle receives a salvage title if it loses more than 75% of its original value and is declared a total loss by an insurance company.
Sometimes it is issued to vehicles with not so much deterioration, which means they can be easily repaired, pass safety inspections, and even be sold in the used car market again for lower prices. No matter the extent of damage incurred, this title makes a vehicle no longer eligible for financing and makes it difficult to insure.
So, if you see a salvage title car that can save you thousands of dollars, remember that it may have a lot of hidden issues and may require a lot of repairs in the future.
Rebuilt or Reconstructed Title
A rebuilt or reconstructed title is issued to salvage cars that have gone through significant repairs or transformations to a point where it is functional again.
When these vehicles are fixed, inspected by the Department of Motor Vehicles (DMV), and deemed safe for public roads, a rebuilt or reconstructed title is issued, and they become legal and safe for road use on public roads.
When considering a car with a rebuilt title, buyers should evaluate the quality of the repairs and the vehicle’s overall condition. While these cars can be a good deal, they may still carry risks, such as hidden damage or subpar repairs.
READ ALSO: Differences Between A Salvage Title and Rebuilt Title
Lemon Title Brand
Sometimes, you hear people talk about lemon cars and their several mechanical issues. Obviously, you don’t want a lemon car. But when does a car become a lemon?
A lemon can be one that has been identified with many malfunctions and multiple failures of the same mechanical part while being under warranty.
A car does not become a lemon as soon as malfunctions are identified. If the problem fails to be fixed even after a lot of repair attempts, it can then be called a lemon.
Buying a car with a lemon title can be risky, as these vehicles may continue to exhibit problems. Buyers should be cautious and consider the potential for ongoing repairs and diminished resale value.
Bonded Title
A bonded title is given to cars with missing ownership documents. A vehicle with missing ownership documents is issued a security bond that is equal to the car’s value and can be passed on to the next owner.
To obtain a bonded title, the vehicle owner must purchase a surety bond. This protects the owner financially for around three to five years if any future ownership claims arise and can be used for registration without hitches.
Other Types of Car Titles
There are over sixty different types of title brands that may be reported on a vehicle, but we have covered the most common ones above. You may, however, find some of these in the used car market:
Odometer Rollback Title
Odometer rollback titles are branded on vehicles that have had their odometer tampered with in the past. They signify that a vehicle had its odometer illegally turned back, so it will show less mileage than it actually has.
This act makes the car buyer think that a certain vehicle has traveled fewer distances and is in better condition than it really is. If you find an odometer rollback title on a vehicle, it could mean that you’re in the middle of a fraud and need to walk away immediately.
READ ALSO: What Does an Exempt Mileage Title Mean for a Car?
Flood / Water Damage Title
A flood or water damage title is given to vehicle that is severely damaged by water from thunder storms or flash floods, hurricanes or any natural disasters causing water to surge in the vehicle.
These vehicles may have some hidden defects that may include electrical faults and mold among others which can be demanding a lot of cash to be fixed. This is why you need to be very careful when purchasing a car with such a title because in most cases the associated risks are significantly more than any gains to be made.
If you decide to buy such cars, then arrange for an inspection with an expert mechanic and ensure that the vehicle is in a good state.
Junk Title
When a vehicle becomes inoperable or damaged beyond repair, it will be issued a junk title. These kinds of vehicles have no market value and will most often be sold for scrap or parts. Owners of vehicles with a junk title must follow specific procedures to dispose of or retitle the vehicle properly.
Affidavit Title
An affidavit title is a legal document provided by the seller to show their ownership of a vehicle and to disclose any potential legal issues related to the title. This document is mostly issued when the vehicle has no ownership documents. This stands as proof of ownership and gives the owner the right to sell the vehicle.
Lienholder Title
A lienholder title, also known as a memorandum title, indicates that a financial institution or lender has a legal claim to a vehicle until the loan used to purchase it is fully paid off. This means that the lienholder can claim ownership of the vehicle if payments are not made.
How to Check a Car Title
Before completing any used car purchase, it is important to check for title brand records and identify the type of title a vehicle may have. You don’t want to be stuck with a salvage title car or one with a lemon title.
To get a title brand check, you can use the following sources:
Online Resources
Online resources can check several government databases and verify if a vehicle has been branded in the past or not. With the Vehicle Identification Number (VIN) of any vehicle and their VIN check tool, Detailed Vehicle History can check valuable information about a vehicle’s history, including any titles it may have had in the past.
This gives you a chance to spot hidden records and make the best decisions.
DMV Records
Accessing DMV records is another way to obtain title information. Buyers can contact their local DMV office to request records that detail the vehicle’s title history, including any liens or legal claims.
Conclusion
Knowing the types of car titles is one thing; checking for branded titles is another. You need to verify whether a vehicle has been in any serious accidents in the past or has been declared a total loss at any point.
Our title check tool is free to use and can save buyers a lot of money. Try out our tool now and be sure of any vehicle’s title status!
