A brand is a permanent designation or notation that goes on a vehicle’s title, warning potential buyers that at one point, there was something wrong with the car. The reasons for the branded title could include that the vehicle was previously destroyed, stolen, salvaged, flooded, rebuilt or had an inaccurate odometer.
Financing a Vehicle With a Branded Title
Yes, technically, you can finance a vehicle with a branded title. However, it may be difficult. Certain defects or histories are considered high risk by lenders. For instance, a vehicle with a salvage title is one that has significant damage and needs to be repaired before it is safe to be on the road. Financing a salvage title vehicle is going to be difficult considering that vehicle has already been written off as totaled. You also cannot insure it.
You may have a greater chance of financing vehicles with other types of branded titles, although you can still run into obstacles.
Getting a Loan for a Car With a Rebuilt Title
It is possible to finance a vehicle with a rebuilt title, although not always easy. A vehicle with a rebuilt title is one that was previously totaled (it may have had a salvage title for a while), yet it was reconstructed and certified to be road-ready and safe.
To obtain a loan for a rebuilt vehicle, you need to show the lender that the vehicle is in good working condition. This requires having it checked out by a certified mechanic – and one separate from the vehicle seller.
The other important factor in obtaining financing for a car with a rebuilt title is your credit score and history with a lender. The better your credit score and relationship with a bank or credit union, the more likely you are to get a loan. Having a minimal credit history or lower score could make you and the vehicle too risky for a lender.
Insuring a Car With a Rebuilt Title
You can insure a vehicle with a rebuilt title, although you may have to go through a longer process than a car with a clean title. You may need to provide photos of your vehicle, repair records and a certified mechanic’s statement that the vehicle is in good working order.
The issues with rebuilt vehicles are that they are deemed to be riskier than vehicles with clean titles. There could be unknown defects or safely hazards. Also, these vehicles are worth a great deal less than a similar vehicle with a clean title. Your rebuilt title could be worth 40 percent less than the same make, model and year that never needed to be significantly repaired.
You can obtain a liability insurance policy from most insurers for your vehicle with a rebuilt title, but you may not be able to buy a full coverage policy. It is rare for insurers to offer collision coverage for rebuilt vehicles.
When it comes to insuring a rebuilt or other branded title, speak with a number of insurers about their options and get quotes before making a decision.
Read More: What Is a Rebuilt Title?
Is Buying a Car With a Rebuilt Title a Bad Idea?
Whether or not you should buy a vehicle with a rebuilt title depends on your circumstances, the vehicle and what you intend to do with it. If you are on a particularly tight budget, a vehicle that has been rebuilt may be more in line with what you can afford. However, you need to keep in mind the higher risk of repairs in the future and the potentially higher insurance premiums.
If you want to purchase a vehicle that is going to last you a decade, you may want to look for a new or gently used vehicle. A rebuilt vehicle has been through a lot and may not stick with you in the long run. However, if you are looking for a cheap vehicle to run errands around town for the next few years, you may be able to save a great deal of money with a rebuilt car.
You simply need to weigh your options, do your research and speak with an independent mechanic before financing any vehicle with a rebuilt or branded title.
A branded title is one that has a special, permanent designation regarding the history of the vehicle. The kind of brand a vehicle may have depends on state regulations.
Victoria E. Langley is a legal content writer living in the Pacific Northwest. She holds a B.A. in philosophy from Northern Illinois University and a J.D. from the John Marshall Law School of Chicago. She has worked as a clerk for a boutique law firm handling breach of contract litigation, a corporate document reviewer, and a legal counselor for a transactional law clinic. She now focuses on translating legalese into everyday language for firms around the country. Her work has appeared on the U.S. News Law Directory and many law firm's sites. Learn more from her website, langleylegalwriter.com