If you’re attempting to purchase a vehicle, you should check the vehicle’s title. Many people don’t actually know how to check if a vehicle’s title is clean or not. Ensuring the vehicle’s title is clean can help you to save money and a lot of hassle in the long run. Also, the more knowledge you have regarding a vehicle can be very beneficial.
There’s a big difference between clean and rebuilt titles as well. Rebuilt vehicles can be risky, but considering one might be a good idea, too. Continue reading to learn about obtaining a vehicle’s title and checking to see if it’s clean.
What is the Title of a Vehicle?
A vehicle title is a document that shows the ownership of a vehicle. All vehicles have a title. The individual state’s Department of Motor Vehicles or DMV updates the title when needed.
Whenever a vehicle’s ownership changes, the DMV issues the updated title to the new owner. This document is needed if the owner has to show proof of ownership of a vehicle. Whether the title is clean or not is another matter.
All titles start clean. The only thing that changes the clean status is an insurance company’s claim of loss or damage. If the vehicle is damaged, a claim is filed with the covering insurance company. Some of the causes of damage can include:
- Hail or ice damage
- Fallen trees or other items
The insurance company assesses the damage incurred and decides if the vehicle is worth repairing or claiming a total loss. For most states, having insurance coverage is a legal requirement to buy a car. Proof of insurance is necessary for a dealership to allow a buyer to leave with the vehicle.
In the event of an insurance claim, the driver’s policy is how they decide what they’ll cover. If the buyer finances a car, they usually are required to have full coverage. The company either pays for the repairs or sends a check for the vehicle’s value to the owner. They usually decide the amount they’ll pay based on the least expensive option. If the insurance company files the claim as a loss, the DMV updates the title.
Handling a Totaled Vehicle
If a vehicle is considered a total loss, the insurance company usually deals with the disposal of it. They’ll usually auction it for the salvage value. However, the owner could keep the vehicle and return it to a safe and drivable condition.
In most cases, the insurance company’s determination is accurate, and the owner doesn’t have the means to repair the vehicle affordably. Most drivers will cut their losses and take the check they receive to buy another car.
Keeping a Totaled Vehicle
If they decide to keep the vehicle, they’ll take on the burden of repairs and dealings with their state DMV to change the salvaged branding on the title. Not to mention the cost, which is the biggest concern. If they can repair the vehicle, they might be able to have the DMV change the “salvage” branding to “rebuilt.”
Changing the Branded “Salvage” Status
Changing the status of a title is often easier said than done. If the owner cannot change the branding, they cannot drive the vehicle legally on publicly owned roads. If caught driving the vehicle, they’d have to face legal consequences. These consequences can be severe due to them endangering themselves and others. Aside from DMV penalties, the owner could be stuck with a useless vehicle.
Finding another buyer or receiving their intended price will likely be hard to do. Most don’t want to buy a “project” vehicle. The owner will have to work hard to sell it to someone else. If they’re unable to sell it, they’ll have to cut their losses, which can be a hard pill to swallow.
What Is The Difference Between a Clean Title and a Rebuilt Title?
Rebuilt titles are pretty self-explanatory. Now knowing what a clean title is can help you to make better vehicle purchasing decisions. The difference between the two is the rebuilt vehicle is not worth as much as a clean titled vehicle.
Only some states allow this change of branding from salvage to rebuilt. The vehicle will not have a clean title issued again after being branded with salvage or rebuilt. A potential buyer can use this information to make a more informed decision to purchase a vehicle. It helps them to be aware of possible scams and not overpay for a vehicle that is not worth it.
Is Buying a Rebuilt Title Bad?
Usually, most buyers avoid buying rebuilt vehicles. If a vehicle has a rebuilt branding on the title, then it means the vehicle was in a major accident. However, if a reputable mechanic approves the vehicle and the repair work is good, then it would be a great way to get a good price on a used car. There are some things to know about if you are looking at buying a rebuilt titled vehicle.
Problems With Buying a Rebuilt Vehicle
The main issues with this type of vehicle are insurance and financing. It is harder to find an insurance company that will offer a policy on a rebuilt vehicle. Although, even harder than that is to find a lender willing to finance a rebuilt vehicle.
Insurance companies will probably charge a higher premium on a rebuilt vehicle because it is harder to assess the damage if it would be involved in another accident. There are few creditors willing to finance rebuilt vehicles since there is less of a chance for them to make their money back. If the vehicle is in another accident, the value of the vehicle will drop even further.
Checking the Vehicle’s History
Looking for a Clean Title
The owner may try to sell the vehicle to someone without telling them the truth about it. As most people already know, this kind of deception does happen to good people. With the help of the internet, this problem doesn’t happen as often. However, it’s still crucial to check because it could happen.
Most people can check the history of a vehicle for a low cost. The easiest way to do this is by looking at the title, usually in the top right corner. If the vehicle’s title is clean, then the box in this area will be empty. If not, then this box will show “salvage” printed in it.
Vehicle History Report
If the seller cannot or will not produce the title, the buyer should walk away. The buyer can also do a little research online to see the vehicle history report. Carfax is a popular choice for this information. Then the buyer can see if something is wrong and make a better decision.
A vehicle history report can show any accidents the vehicle was involved in and how many owners it has had before. Usually, a buyer only needs the vehicle’s VIN, or Vehicle Identification Number for this. You’ll find the VIN on the title, insurance, or registration documents. The manufacturer puts the VIN on the inside of the door panel, or the corner of the windshield, being visible outside.
So, when you’re looking for your next vehicle, you know what to look for to make sure it has a clean title. As mentioned before, it’s not difficult to do a little research before making a vehicle purchase. Thanks to the internet, deception when selling a vehicle is not common anymore, but it’s still possible. Checking for a clean title could save you thousands of dollars and one enormous headache.