When a person purchases a used vehicle, it can sometimes be difficult to know the vehicle’s full history. The vehicle may have been in accident, may have flood damage or may have been owned by several different people.
Buyers may not be aware that there are several types of titles and they each can provide information about the vehicle’s past. When buyers have this information, it can help them make an informed decision about their purchase.
Title types
Clear titles state that the vehicle has no outstanding financial obligation on it that would prevent it from being sold. This is a preferred type of title because in many situations, it is the only type that allows used car buyers to be eligible for a vehicle loan.
Salvage titles are used where a vehicle loses a major portion of its value because of a significant accident, repair or theft. This title is issued when the vehicle loses more than 75% of its original value. Salvage titles usually mean that the vehicle is no longer eligible for financing.
A junk title is used for vehicles that have been sold to junkyards or will be sold for scrap metal or for parts.
Reconstructed and rebuilt titles are somewhat similar. Reconstructed titles are used for vehicles that have been significantly repaired. They are usually issued by a collision center, body shop or a licensed vehicle rebuilder. A rebuilt title is used for vehicles that have been significantly rebuilt.
Buyers should also be aware of water damage titles which are issued when vehicles have significant water damage from floods, hurricanes or similar weather events and odometer rollback titles where the odometer has been turned back to show less mileage than the car actually has.
It is against the law to change or hide a car’s designated title. If a buyer believes he or she has purchased a vehicle with an altered title, an experienced attorney can help.