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WHAT DOES A “CLEAN TITLE” MEAN?

WHAT DOES A “CLEAN TITLE” MEAN?

A lot of times, you see the term “clean title” on used car ads. What does this exactly mean? Does a Clean Title mean a “clean” car? This article will walk you through the basics and help you understand the car title components, car titles examples, and will end with excellent tips to help you detect a real clean-titled car.

What Is A Car Title?

A car title is a document every car should have. It will tell you who’s the car owner and which state issued the title. In any buy used car process, there will be a title handed from the seller to the buyer.

A car title has many essential components:

  • Vehicle Identification Number (VIN): this is a unique number for every single car. It is 17 characters long, where you can use to look up information about the safety issues with the vehicle. This number must be the same as the imprinted number on the car. Therefore, if you want to buy a used car, make sure to check that the VIN on the title and the car are identical. You can find the imprinted VIN on the base of the driver’s door or the driver’s dashboard corner.

 

  • Year, Make, Model, Style, and Series/Body: You will find this information as abbreviated letters in the car title. For example, a 1992 Toyota Celica made in Washington will say: Model CG, Style CP (coupe), and Series CELCP.

 

  • License Number & Date: some of the car titles might have the vehicle license number. The car title will include the date of the last ownership transfer.

 

  • Car Mileage: The title can also include information about vehicle mileage. It will show as a group of zeros. What is more important is showing the letter “E” under the “odometer status,” which represents the old age of the vehicle.

 

  • Owner or Lienholder: every car title shows the name and address of the current owner. If the car is bought through the bank (financed), the title will show the lienholder name. For titles with lienholder name, cars cannot be transferred. Once the vehicle is paid off, the bank should stamp and sign the title, and the owner must provide documentation showing lien paid off before being able to transfer the car title.

 

  • Other information: The car title might include additional details like color, brand, fuel type, scale weight, etc.

 

  • Title Transfer: On the back of the car title, you can add or find information about car transfer. The seller will add the buyer’s information in this section, and the buyer can then take it to the DMV to order a new car title under his name.

 

Car Title Types

A car title can be a “clean title” or a “branded title.” Below are the details about each car title type.

  • Clean Car Title: a clean car title means that the car was not involved in catastrophic distress or simply was never deemed as a total loss. With that in mind, clean vehicles tend to have higher values as compared to not clean cars. However, the term “clean” does not necessarily mean that there are no major mechanical issues in the vehicle which will be explained in more detail later in this article.

 

  • Branded Car Title: if the car does not have a clean title, then it is considered a “branded title” car. Branded titled vehicles indicate that the vehicle had experienced significant damages, and you will find the “brand” area in the vehicle titled filled.

 

According to the National Motor Vehicle Title Information System (NMVITIS), there are more than 60 types of car title brands. Some of the common car titles brands are:

  1. Salvage Title: if the car title is branded with “salvage,” it means that the car is not drivable and can not be insured. Simply, it is dangerous and illegal. That’s why many states do not allow individuals to buy salvage cars and only allow it to repair companies. The vehicle is considered salvage if the value of repair equals or higher than the current value of the vehicle as determined by the insurance company or the body shop.

Some people think that every salvage car is an unrepairable car, which is not the case. Salvage car has to do with the price of repair as compared to the current price of the vehicle, which means that salvage cars do not necessarily have to be sold as parts or scrap.

In lots of cases, salvage cars can be fixed and issued a new “rebuilt” title. Salvage cars can never get a “clean title” legally.

 

  1. Rebuild Title: You can legally drive a salvage car if it was repaired correctly and passed a safety inspection. Not all salvage cars are qualified for rebuilt; this depends on the severity of the car damage and the ability to be repaired. Once the salvage car is repaired, a new title is issued with the brand changed to “rebuilt.” Some states refer to this type of car brand as “reconstructed,” “repaired,” or “reconditioned.”

 

  1. Flood Irreparable Title: as the name states, this title means that the car was submerged deep in water, and the water completely socked the engine and the other car parts. Flood damage is very critical and implies that there is no way this car is drivable, and it should only be used as parts or scrap.

 

  1. Lemon or Buyback Titles: If the title brand says Lemon or Buyback, it means that the car had an issue repeatedly, and repair was not able to fix it. Another reason to have a lemon brand is if the vehicle did not operate for at least 30 days. In this case, the car should also be considered for parts or scrap.

 

  1. Fleet: a fleet brand means that the car is either rental, governmental, taxi, or a company vehicle.

 

  1. Junk: A junk branded title means that the car can only be used as parts or scrap. It can be called many other names like “crushed,” “scrape,” “totaled,” and “diminished.”

Does A Clean Title, Mean A Clean Car?

It is now apparent that a clean title car provides much confidence and trust when it comes to vehicle history. But the question now: does a clean title always mean a clean car?

The answer is, unfortunately, no. The clean title does not tell the whole story of the vehicle and does not be surprised to see significant mechanic problems in clean title cars like engine or transmission failure, and power train issues.

In some cases, owners might fix significant repairs on their own and call it repaired. Others might pay cash under the table for insurance companies to keep their premium while others might do a full car reconstruction (i.e., extensive structure change)!

Hidden repairs are undoubtedly illegal and very dangerous, but unfortunately, it can happen, and you want to dig deep when shopping for a used car to not to fall in these scams.

Washed Titles

Changin the car title from branded to clean “title washing” is extremely dangerous. Title washing can happen between different states, where some people can register a branded title car as a clean title in states with fewer requirements when it comes to car title issuing.

Title washing is misleading and dangerous to unexperienced used car shoppers. Therefore, when you are planning to shop for a used car, make sure to get the vehicle history and bring your expert mechanic who can tell if the vehicle is clean titled or branded.

According to a recent study, washed titles are a big issue in many states, and the numbers could be shocking! For example, in the state of Mississippi alone, there is one washed title in every 44 car titles! This is a significant number, and this puts many red flags and encourages us to think and be patient when shopping for a used car. Who wants to buy a car which was submerged underwater for days?!

Which Car Title Is Best for You?

Although clean titles can be preferable, sometimes a branded title can be better for you. Knowing all of what’s going on with the washed titles, there is some sort of risk buying a clean titled car if proper research was not done the right way.

With branded titles, there is a level of transparency with the seller. The seller does not have anything to hide, and all information can be provided, including a health report, complete repairs, and a comprehensive 151-point inspection.

Simply, shop smart!

Tips on How to Shop for a Used Car?

Whether you decided to buy a clean titled car or a branded titled car, here are a list of tricks and tips to keep in mind when shopping for a used car:

  • Ask for more information: always ask for more details like:
    1. Number of owners
    2. Length of ownership
    3. Where the vehicle originated from
    4. Accidents history
  • Service Record: check if the service record is available and request it if possible.

 

  • Trusted Third-Party Mechanic: no matter how good you are in shopping for used cars, an experienced mechanic can detect issues by just taking a closer look at the vehicle or running a simple drive test. Therefore, it is a general rule to ALWAYS bring your third-party mechanic with you to avoid falling in all sorts of car shopping scams.

 

  • Request Car History Reports: There are many reports with excellent information about vehicle history (e.g., CarFax, Experina’s AutoCheck). You can find these reports in many resources like Autolist, and it is very user friendly and easy to access. Some information you can see in the history report can include:

 

  1. Water damage
  2. Manufacture buyback
  3. Junk scraping
  4. Structure of frame damage
  5. Salvage auction
  6. Fire damage
  7. Hail damage
  8. Grey market record

 

  • Drive Test: It is recommended to spend at least 20 minutes in a driving test for any purchased used car. When driving, try to detect any funky noise, weird smell, or sometimes windshield and wipers not working.

 

  • Check Online Resources: With the advanced technology and the expansion of global information technologies, it became easier to find critical information about many of the used cars available for sale.

 

  1. Check the NICBs’s Theft and Salayge Check
  2. Visit the NHTSA’s Recall Check
  3. Try the NHTSA’s Safety Rating Check
  4. Most importantly, make sure to visit the National Motor Vehicle Title Information System (NMVITIS). What is unique about this website is that all state’s DMVs, junk yards, salvage agencies, and insurance companies MUST report to this database by law.

 

  • Finally, Be Patient: shopping for a used car needs patience, and rushing can make you lose a lot of money. It might make more sense to pay for Lyft or Uber or carpool until you find the perfect car for you.

 

  • Kelly Blue Book Value: In many cases, you will see clean-titled cars with a meager price, this can put a red flag and might mean it is a scam or the vehicle is stolen or has a significant issue. Kelly Blue Book Value provides you with what value each vehicle worth. Compare the price to what is stated in Kelly Blue Book and do not go purely after meager amounts.

In Conclusion, Shop Smarter!

You need to know what the difference between clean-titled cars and branded-titled cars is. The clean title simply means the car was not deemed as a total loss by the insurance company while the branded-title cars are cars experienced severe damages (e.g., flood, fire).

Many of the branded-title cars can be “title washed” and simply registered as a clean title car. Therefore, when you shop for a used car, make sure to bring your experienced third-party mechanic, review all history reports for the vehicle, and check any available online resources to know more about your new car.