For the most part, buying a car is very simple and relatively easy. You go to a dealer, select the vehicle that perfectly fits your budget and needs, plan if you want to make a full payment or pay in instalments, get all the mandatory and optional auto insurance coverage, fill up the tank, and you’re good to go. The process is very similar if you buy a car from someone else instead of a dealership. But then, what is a branded title?
You might have seen this term in the automotive industry. The other thing you might have seen must be how cheap a branded title car is compared to the exact vehicle in a dealership. So what’s a branded title? When you buy a car from a dealership, you’re getting a car in perfect condition, with all the quality checks done and in excellent working condition.
Branded title cars are cars that have gone under the repair machine because they had some defects. Branded title cars had severe defects or significant damage, resulting in the repairs and, hence, the lower price tag. The great thing about branded title cars; they are almost 40% cheaper than their clean title counterparts. Imagine getting a 40% cut on the price of a car!
Here’s the wrong thing: Branded title cars are notorious for complicating auto insurance. If you are planning on buying a car with extensive damage, you might want to pause and consider all the complexities that come with it, especially with auto insurance policies. Let’s take a deeper look at it.
Types of Branded Title
When we say a car with “damage or defect”, it could mean a dozen things, each with different effects on the functionality and price of the vehicle. For example, there are branded titles with defective odometers. These cars are cheaper and usually not dangerous to drive since everything else is in perfect condition. Vehicles with altered odometers are easy to insure as well.
Then there are branded titles with water damage. Cars damaged due to floods, with a damaged engine, interiors, etc., are even cheaper than cars with altered odometers. Some complications may arise when getting an auto insurance policy for these cars, such as a comprehensive or collision policy. But if you could show that it has been repaired correctly, it would make the process easier and quicker.
Salvage Branded: An Auto Insurance Nightmare
Where you get the most discount is also where you get the most problems with auto insurance policies. A salvage brand is a car so extensively damaged that it was declared a total loss. Car insurance companies give any damaged car “total loss” when the cost of repairs exceeds the actual cash value of the vehicle.
So imagine a car getting in a nasty collision accident. This results in the car getting “totalled”. The front end is pancaked, the bumpers are non-existent, the airbags have been destroyed, and the entire car looks like a cake someone sat on. This car would be declared a total loss.
Once declared a total loss, it cannot be driven on the roads. The insurance company usually sells these cars in auctions where people can buy them, repair them, and then sell the vehicle at a lower price. This is where the complication begins.
Even though a salvage branded car has been perfectly repaired (now called “rebuilt title brand”), you’ll find most auto insurance companies shying away from it. Finding a car insurance company willing to sell you optional coverage for salvage branded cars is tough.
Getting liability coverage for these cars is relatively more straightforward since it can only be claimed by the other driver. Getting collision coverage or comprehensive coverage is the most challenging part. The first thing you can do is look for local car insurance companies willing to insure these cars.
For example, if you live in Illinois, look for an Illinois car insurance quote and mention that the car has been repaired from a total loss condition. This will give you an idea of the cost of auto insurance policies and the insurance premiums you’ll have to pay. Be ready for a bit more if you can get a car insurer in the first place.
Auto insurance companies have no idea how well these repairs have been done; there is a good amount of chance that something might have been missed. This increases the likelihood of engine failure, improper braking, ABS not working, etc. All these things increase the chance of an accident. So insurance companies will charge you more.
Since the actual cash value of these cars is also meagre, the insurance payout on collision or comprehensive coverage would also be low. So here’s the summary; firstly, it’s tough to find a car insurer willing to insure your salvaged car. Secondly, you’ll have to pay more for auto insurance policies since there is more risk of an accident with salvage-branded titles. Finally, in the case of insurance payout, you’ll get a lower payout since the car's actual cash value is also meagre.
If you feel that getting optional coverage for a salvaged car is not worth it, you can skip it and pay from your pockets if you crash your car. Many people who buy repaired titles do precisely that. It is essential to consider all these factors before you make a purchase. Branded titles will cost you comparatively less, but these cars will be more difficult (and expensive) to insure.
