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Vehicle Title Branding
Vehicle Title Branding
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Vehicle Title Branding
If you're considering purchased a used automobile or other vehicle, one of the things that you should be aware of is vehicle title branding: what it is, what issues it can help alert you to, and why you can not always rely on branding information (or the absence of it).
What is Vehicle Title Branding?
When a vehicle has suffered major damage, for example from an accident, fire, flood, hail, etc., the vehicle may be written-off and sold for scrap (because the cost of repairs exceed the value of the vehicle). In such cases, the vehicle is considered a "total loss" or "totaled".
In most US states and provinces of Canada, the law requires a permanent designation of this status is added to vehicle's title, permit, or registration documents. This designation is known as "Branding".
The purpose of this action is two fold:
Types of Vehicle Branding
In the US and Canada, the majority of vehicle title documents, as well as the laws relating to them, come from the various states and provinces. As a result, even though most states/provinces do have laws relating to branding, there can be wide differences between the types of branding that are applied, and the criteria used to assign vehicles to different branding categories.
The most common categories of branding are:
Issues and Pitfalls
As already noted, the laws around branding, and the criteria used to assign vehicles to different categories and statuses, are generally made by individual US states and Canadian provinces. As a result, there are wide differences, and things which need to be disclosed in one location, may not be disclosed in another.
A second issue, is that when vehicles are moved between different jurisdictions, branding requirements may differ, and if a vehicle is retitled the branding information can be lost (when done deliberately this is known as "title washing").
Another more subtle issue is that the system largely depends on accurate assessments of the value of vehicles and the cost of repairs. Anybody with any experience of automobiles will know that cost estimates for repairs can vary widely, even before one considers variations caused by choice of parts (new parts vs. aftermarket parts vs. parts taken from scrap). Moreover, an insurer or owner assessing the potential cost of repairs, may be inclined to prefer low cost estimates, given that branding the vehicle as a total loss would negatively affect any remaining resale value for the vehicle.
Finally, it does appear (see for example Consumer Reports July 2009), that there is a market in what is known as "clean title wrecks". These are vehicles that been severely damaged, but which have retained clean title by virtue of the damage being just below the write-off threshold, or by not having collision insurance, or by being self-insured. In such cases, the "clean title wreck" is typically bought by someone knowledgeable about motor vehicles who repairs the vehicle and then sells the vehicle on to a consumer - the consumer is of course never made aware of the vehicle's dubious history.
To summarize then, while branding can provide important and useful information about a vehicle that you are considering buying, you can't rely on it to tell you the whole story - or in all cases.
That's why it's always important to properly inspect a vehicle† before deciding whether to buy.
Here are some related links and websites:
Visitors' Comments about this Article
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The information on this page was not written by a lawyer, and is not intended as legal advice. Please consult an attorney if you need legal advice.
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