Understanding Car Titles

A car title is a document issued by your state’s DMV or Secretary of State. The title indicates who the owner of the vehicle is, and includes information about the car such as the year, make, model, and history. But did you know there are different classifications for car titles?

How Car Titles Work

Every vehicle starts with a clean title, and in order for the type of title to change, major damage must occur. An insurance company files to change a car’s title, and it’s important they record every major event that takes place. This is to make sure the next owner is well aware of the vehicle’s history.

Branded Car Titles

By definition, car title “branding” is the process of giving a label to the title of a vehicle. This is an indicator of what type of history the car has. Vehicle titles are handled by state agencies, so they can vary from state to state.

Typically, buying a car with a branded title carries a negative connotation, usually referring to vehicles that have experienced collision, fire, and/or flood damage, been sold for scrap, and have gone through insurance claims and repairs.

There are four different major classifications for car titles. While these can have different names depending on the state you live in, here are the most common title names you typically come across:

  1. Understanding Car TitlesClean – A clean title means the car hasn’t received any major damage that might deem it a total loss. This is the most ideal title to search for when buying used.
  2. Clear – Not to be confused with clean, a clear title means there’s no financial lien preventing the vehicle from being sold. Simply put, the car is owned free and clear by the seller, and isn’t tied to creditors or third parties that could claim ownership.
  3. Salvage – If a vehicle is involved in a major accident and is damaged anywhere from 75 to 90 percent of its value, it’s deemed a total loss and given a salvage title. Be cautious about vehicles with this title – it’s typically not safe to buy salvage title cars, as these vehicles may need extensive repairs, may be uninsurable, and/or could cost you more to insure.
  4. Rebuilt/reconstructed – A rebuilt or reconstructed title is given to a vehicle that was repaired after being classified as salvage. Basically, it means the car experienced extensive damage, but was inspected by the state once repairs were done and classified as being “fixed.” The problem with these cars is that even though they’re repaired, they may need further repairs and may not be reliable.

Note that there are other branded titles including lemon, flood, bonded, and junk that some states recognize. Each state’s list of title brands varies, and if you aren’t sure which your state recognizes, check your local DMV or Secretary of State.

Car Title Washing

One thing you need to look out for is title washing, especially if you’re purchasing a vehicle that has crossed state lines. Depending on how a state classifies the names for its branded titles, some title brands may not transfer over to the new state. This is an easy way for sellers to get rid of damaged cars in a timely manner. In many cases, this is done so that sellers profit even more from the sale of these vehicles.

Always double check the title brands that are recognized by your state or the state the car came from, and be sure to run a vehicle history report and have the car inspected by a certified and trusted mechanic.

Be in the Know with Car Titles

It’s better to be safe than sorry, and it’s important you understand what different titles mean, and to double check a vehicle’s history for title washing. You don’t want to end up purchasing an unreliable car because you weren’t given an accurate title.

If you’re ready to buy a vehicle, but aren’t sure where to start your search, let The Car Connection lead the way. With our simple auto loan request form, and our nationwide network of dealerships, we want to connect you to a local dealer that can help you get the financing you need.

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