Branded Titles on Vehicles - Yay or Stay Away?

[CO2CA]

There's a car sales company in the next town over that sells branded title cars or cars that have been totaled by insurance (due to collision, water damage, theft, etc). They look like they're brand new because they supposedly fix them up. You can get them for almost 1/2 the price as one without a branded title. One that I am looking at suffered pretty extensive front end damage from a collision, but looks completely new after the rebuild. The company gets excellent reviews, except for a couple 1* which is typical for that line of business.

My question is, how does insurance deal with this? Is it hard to get insurance on a branded vehicle? I know there are several DISers who have expertise in the insurance/automotive industry, so was curious.

 

[disneychrista]

No experience, information or any input other than to say there is no way I would purchase one.

 

[Kathryn Merteuil]

I believe the short answer is to stay away. I am not involved w/the insurance end of this stuff, but insurance is not the only problem you have to worry about with these type cars.

Some institutions will only loan a certain percentage of "value" on a vehicle with a branded title (financing may or may not be an issue for you)

Also, when going from state to state, there can be some serious issues with even being able to title/register a car with a branded title. this kind of thing varies from state to state, but some states are VERY difficult when it comes to vehicles with branded titles. I can think of one instance where somebody bought a Jeep with a branded title, flood damage I believe (seems like Jeeps are always problems) and the state of Missouri would not allow him to title/register the vehicle in his own state. The state's license bureau (or whatever they call it in MO) said the vehicle was "junk" and disallowed it. The state of Illinois is also pretty picky about branded titles. I can think of another occasion where a customer (an Illinois) resident has a Jeep paperweight in his barn. He bought the Jeep in Indiana with a branded title. In order to title/register the vehicle in Illinois, it must pass some kind of inspection to have a "rebuilt title", but it will not pass the inspection. The state of Illinois is so picky that not only are people having issues with vehicles with branded titles, they are throwing up serious obstacles for vehicles that have even been titled previously in states like Georgia, Florida, Texas, or the Carolinas. They red flag certain counties/regions because of being areas that have been flooded. I learned this directly from the IL SOS office when one of our customers was having a difficult time and huge delays titling/registering a vehicle. Some states are a lot more lax about this kind of stuff however, Kentucky is the first one that comes to mind.

In regards to mechanical stuff, I have absolutely no idea if they are good or not. I know titling/registering and stuff can be a huge issue. I could speculate that insurance would have its own set of problems. I think the wise choice is just to avoid that kind of stuff altogether.

 

[Klayfish]

There's a car sales company in the next town over that sells branded title cars or cars that have been totaled by insurance (due to collision, water damage, theft, etc). They look like they're brand new because they supposedly fix them up. You can get them for almost 1/2 the price as one without a branded title. One that I am looking at suffered pretty extensive front end damage from a collision, but looks completely new after the rebuild. The company gets excellent reviews, except for a couple 1* which is typical for that line of business.

My question is, how does insurance deal with this? Is it hard to get insurance on a branded vehicle? I know there are several DISers who have expertise in the insurance/automotive industry, so was curious.

They are very tempting, but you need to be 100% sure you know what you're getting into. If you don't know how to look at collision repair, you'll want a well qualified shop to make sure the repairs were done properly. This is especially true for the unibody repair (what people still call a "frame"), as you need to look far beyond the shiny paint. If it was done right, then there's no reason not to buy one. If it was done on the cheap, and usually these flipping places do it on the cheap, then it could be trouble for a non-car person.

From an insurance perspective, you'll have to contact your carrier. Some carriers won't put COMP/COLL coverage on a prior salvage vehicle. If they do, understand that the ACV (actual cash value) will be around 30-40% less should something happen to it.

As long as the paperwork was done right, title and registration shouldn't be an issue.

On the whole, if you do your research and know exactly what you're getting, they're nowhere near as bad as people fear them to be. There are a lot of scammers in this area of the car world, so just be diligent.

Here's a good example of a prior salvage car where you need to look past the shiny paint. This is DS15s' project to turn into a race car. We just bought it a few weeks ago. By just looking at the outside, would you have guessed it has a salvage title, as well as a significant unibody issue? I knew of the issues when we bought it.

 

[luvsJack]

I don’t know the details about the titles and insurance (@Klayfish woukd be much more knowledgeable on that) but my sister and bil bought both of their daughters’ first cars this way.

But the person they bought from specialized in one kind of car. He bought salvaged Toyotas and fixed them. They were great little cars and lasted both girls through high school and college (4 years of college for one and 6 years for the other). I assume they traded them in on their new cars after college.

They were fortunate in that they already knew about the guy and knew he could be trusted. In fact, they had it checked out by a body shop and a mechanic shop at his suggestion (their choice on the shops).

 

[tvguy]

I have never had one, but I have several friends.......all of them working in the auto industry........and that's all they'll buy.

 

[_19disnA]

I would avoid that type of vehicle. There is a probably a good reason the insurance company considered the car totaled. Water damage (flood or hurricane) can cause a LOT of hidden issues to wiring, electronics, etc. that won't be initially obvious. Certain types of accident damage can never be successfully repaired. It can also be a safety issue if something suddenly fails when you are driving the car a year or two from now. Not worth the risk to you or your family. Dubious auto shops can make cosmetic repairs to a vehicle and you are left with a disaster no one else will touch. Getting the DMV to register the vehicle can also be an issue as noted above.

 

[RUDisney]

My DH's family owns a junkyard. I had most of my vehicles with restored titles while my kids were growing up. Kids kill car interior anyway (even though I'm a mad woman about this)... they spill things, grind food into the interior and are just basically messy.

One thing I made sure to NOT buy was a vehicle that had front end damage. The back could be crushed or the side messed up, but you don't know what you don't know about what went on under the hood. Stay away from that damage.

There are different rules in different states about registering your vehicle. When I got my Saab, it had come from NY. Someone took it back to NY to be inspected and then it had to have a special inspection when it returned to PA so it could be titled. Not everyone does these, so you need to find a place that does. They have to be fixed prior to these inspections. Insurance was easy to get on them once they were inspected.

They never lasted as long as other cars we had, but for the price, they were perfect for us. We even donated a van to a charity when I was finished with it. We could have turned it around for about $1,000, but thought that the charity would get better use of it than we would of the money. They did. They ran it into the ground, which is exactly what we wanted them to do.

 

[Cannot_Wait_4Disney]

There's a car sales company in the next town over that sells branded title cars or cars that have been totaled by insurance (due to collision, water damage, theft, etc). They look like they're brand new because they supposedly fix them up. You can get them for almost 1/2 the price as one without a branded title. One that I am looking at suffered pretty extensive front end damage from a collision, but looks completely new after the rebuild. The company gets excellent reviews, except for a couple 1* which is typical for that line of business.

My question is, how does insurance deal with this? Is it hard to get insurance on a branded vehicle? I know there are several DISers who have expertise in the insurance/automotive industry, so was curious.

So Branded title is now politically correct for Salvage title eh? It's selling for far less because it is worth far less. Many insurance companies won't do collision or comprehensive on them and if they do, you'll not get nearly the same for it as you would a standard title vehicle. That said, if you know the car, it may in fact be worth your while.
The first thing you need to understand when buying one is why was it salvaged? Flood? Stay away. Flooded cars have gremlins. Yes those little critters that like to destroy machines. They're real. Or was it a crash. In general for these, the older the car, the crash that got it salvaged may I REPEAT MAY OR MAY NOT, have been quite minor. A fender bender is enough to get some older cars salvaged. A hail storm may do it too. Newer cars either were in extensive crashes or if they weren't, it's a model that is incredibly so expensive to repair, it would defeat the purpose of owning a salvage title car. Owning a salvaged BMW for example, defeats the purpose of a salvaged car. Also, many states now require you to certify the parts before they'll retitle it as salvage which can be a pain in the rear. Yeah. I used junk yard parts on my car and the guy had to sign off on them. It was a pain in the rear. Would I do it again. Yes. I knew the car knew what was in it and it lasted me another 6 years before it died.

 

[Klayfish]

In general for these, the older the car, the crash that got it salvaged may I REPEAT MAY OR MAY NOT, have been quite minor. A fender bender is enough to get some older cars salvaged. A hail storm may do it too. Newer cars either were in extensive crashes or if they weren't, it's a model that is incredibly so expensive to repair, it would defeat the purpose of owning a salvage title car.

A lot of very good points, let me just add a bit and expand on it. You're absolutely right that on an older car it's quite possible the impact that totaled it could have been minor. It could even be purely cosmetic. Newer cars will usually have had a more substantial impact, but not always as hard as you may think. I'll give an example...it's a bit on the extreme side, but it'll illustrate the point. Let's start with a $30,000 car. Say it was in an accident where repairs are $12,000 (part prices play a huge role in this...headlights can be $2500+ alone). That's 40% of the value of the car, not what you may consider a "total". However, say it had a salvage value of $18,000. Doing the math will make it a total loss.

Cost to repair = $12,000 repair + $1000 in rental (for example) cost during repairs = $13,000
Cost to total = $30,000 value + 400 in rental cost - $18,000 return on salvage = $12,400

There are a few other factors that can go into it, but that's the general concept. This is a bit of an unusual situation, but not at all unheard of...or there could be other reasons the car was totaled even if it technically wasn't.

So definitely do your due diligence and be sure you know exactly what the total loss was all about.

 

[CO2CA]

Very interesting points and information!! Thanks everyone, I really appreciate it

 

[disneychrista]

So Branded title is now politically correct for Salvage title eh?

When I clicked the thread I thought it was going to be able putting dealer names on used cars. Or company logo on cars, as advertisements.

 

[monsterkitty]

A co-worker bought a salvaged car and didn't know it. It was stolen a few months later in our school parking lot during parent teacher conferences. When the police found it, it had been severely damaged. The co-worker, who was a first year teacher living in a new state, was told by the insurance company that they would not cover any of the damages because it was a salvaged car. They ended up in arbitration and the insurance company ended up giving her half the value because it was their mistake when they insured it originally. They missed the "salvage" on the title or registration when they insured the car.

Check with your insurance company to see if they will insure a branded car.