A branded title is a designation on a vehicle title that signifies that the vehicle has been involved in a previous insurance incident and has been deemed by the insurance company subject to damage or a total loss. The claim may have been filed by an insurance company or by the owner of the vehicle.
A branded title does not necessarily mean that there was actual damage to the car, but it does mean that the car was involved in an accident and had to be repaired before it could be titled again.
There are many different types of branded titles for vehicles, some of the most common include:
When a vehicle incurs some type of loss event such as major damage, theft, or repair, the title may be designated as a salvage title. The decision to place a title in salvage status is normally made by the insurance company that pays a claim on the vehicle. In some states, there are statutory regulations that require an insurer to brand a vehicle with a salvage title. An example may be that a vehicle incurred damage that is more than 60% of its value. However, an insurance company can decide to place a salvage title brand on any vehicle it decides to, even if there is little or no damage.
Salvage titles can normally be registered for road use. In some states an inspection is required to make sure that the vehicle is safe for the road, and that any parts used for repair are legal and have a verified origin. For your own safety make sure that any vehicle you purchase as a salvage title has operational airbags and valid documentation of the VIN# and all major component parts.
Vehicles for which the title has been sold to a junkyard may be designated junk titles if it is intended to be scrapped or sold for parts. A vehicle’s VIN in the NMVTIS database means that it can no longer be titled after receiving a junk title brand.
A vehicle that has been substantially rebuilt may have a rebuilt title brand issued by an insurance company, body shop, collision center, or licensed rebuilder. A vehicle with a rebuilt title can normally be registered for road use but may have an inspection requirement to verify it is roadworthy. The vehicle insurance may have limits if the title is rebuilt.
A parts-only designation is typically found on a bill of sale or transfer form, not on a title. However, if a parts-only bill of sale is submitted for vehicle title processing, the title may be issued with a salvage brand or other cloud on the title.
When an insurance company has paid a claim for a vehicle and taken ownership from the insured, they have the option of processing the title as a certificate of destruction. In this case, the vehicle is intended to be destroyed and never to be used on the road or registered. It is unlikely that a vehicle with a certificate of destruction can ever be issued a valid title for transfer.
A vehicle with a certificate of destruction can sometimes appear to be in acceptable condition. The insurance company decides to prevent the car from road use to limit its liability in the event that the car is driven and is involved in an accident at a later date. If it is proven that an injury in an accident is because the car had some existing defect, the injured person could claim that the insurance company should not have let the car go back on the road.
A vehicle in otherwise good condition can be issued a certificate of destruction if the insurance company thinks that the airbags could be damaged, the frame could be weakened, or simply does not want to spend the money to do a detailed inspection, and just wants to sell it cheap to a junkyard.
Depending on your needs, a vehicle with a title brand can be a great option if you want to fix up a salvage vehicle or use it for parts. Before moving forward with a vehicle, make sure to check the title for permanent title brands. Any attempt to remove, obscure, conceal, or alter a title brand using unauthorized means can be a violation of law often referred to as “title washing” or “title laundering.” The salvage title designation is shared with all 50 states. Evading a title brand is a serious offense. Getting a new title for that purpose is illegal and results in serious criminal penalties.
Get a new VIN for your “junk” vehicle and retitle your vehicle as a DMV assembled vehicle.
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Do you need to obtain a surety bond for your car title? A surety bond process, also known as a bonded title process, is a great way to get a new title. This can be especially helpful if your title is lost, damaged, or missing. Read on to learn how to get a surety bond for a car title.
A surety bond, known in this context as a title bond, is used to secure the claim of ownership over a car or vehicle that does not have sufficient evidence of ownership. A surety bond is a form of insurance that you obtain to back up your claim that you are the owner. In the event that someone else comes forward to claim ownership, the surety bond company will cover the damages. However, you’ll be on the hook to pay back the surety bond company.
The cost of a surety bond is based on the value of the vehicle. Most states will require the bond amount to be 1.5x the book value of the vehicle. This means, that if your vehicle is worth $4,000, your surety bond amount should be $6,000.
However, you don’t have to pay $6,000 to the surety company to get a surety bond. Most surety bonds cost around $100-$150 to purchase for most average-value vehicles. The remaining amount of the surety bond won’t come into play unless there is a discrepancy in ownership after the title is issued. If that were the case, you will be responsible for paying back the remaining amount.
Surety bonds are often purchased from a surety company, such as ProBonds.com. Since a surety bond is a form of insurance, many insurance agents are also able to issue surety bonds for car titles. Before purchasing your surety bond, make sure to verify the bond amount required in your state and that your state accepts bonded titles. Once issued, surety bonds are nonrefundable.
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A lien on a car title is very common, especially if you financed your vehicle. What does it mean to have a lien on your car title and how do you remove it?
A lien means that someone has a claim on your vehicle. In the case of a car title lien, this person or business is more than likely your lender. When you get an auto loan, your lender (aka your lienholder) will place a lien on your title to signify that the loan has not yet been paid back.
The loan is the money you borrow to pay for the car, the lien is the legal process the lender takes to hold your car’s title as collateral. If you fail to make payments, your lender can repossess your car.
First, you should make sure that the loan has been paid off or otherwise satisfied. It’s illegal to remove or attempt to fraudulently remove a lien if the terms of the loan agreement have not been satisfied.
Once you verify that the loan is satisfied, send a lien release request letter to your lender. To release the lien, your lender must provide a lien release letter on their letterhead or a comparable letter of non-interest. Liens can only be released from DMV records when approval is given by the lender.
Yes! Once your loan is paid off, you will have a clean title in your name. With a clean title, you’re free to sell it, trade it in, etc. If you keep the lienholder’s name on the title, even if the loan is satisfied, the lien will often not be released automatically.
When your loan is paid off, your lienholder should stamp your title as paid and send it off to you to transfer to a clean title. However, most lenders don’t have a lien release department. It’s important to keep up to date on your loan payoff to ensure you submit your request for lien release as soon as your loan is paid off.
If it’s your car, you deserve a clean title in your name.
An abandoned vehicle is one that the owner has left behind with no intention of returning. If you know where the vehicle came from or who it belongs to, it’s probably not an abandoned vehicle.
In most states, not everyone can file for an abandoned vehicle process. In fact, most states require that you are a licensed automotive repair shop, automotive storage facility, towing company, or another authorized company that deals with vehicles.
The first step is often to verify that the vehicle’s value is within your state’s guidelines to use this process. Many states require the value of the vehicle to be around $5,000 or less. This means, in most states, you can’t use an abandoned vehicle process on a luxury or high-value vehicle. However, it’s important to note that not all states have vehicle value restrictions.
The next step is to submit a DPPA request (Driver’s Privacy Protection Act) to the DMV to obtain owner and lienholder records. The DPPA protects driver information from being used or obtained in an unlawful manner. If you already know the owner of the vehicle, you still have to submit a DPPA request to obtain the official owner and lienholder records.
Unfortunately, the abandoned vehicle process is often fraudulently used. The DMV requires that you use their information because, in the past, scammers have used fake addresses and names to avoid actually contacting the registered owners. When the notice is returned unopened, the scammer now has the legal evidence they need to continue with the process. If they were required to use the official DMV records, the DMV would know that they didn’t contact the actual owner and they are in fact scamming the process.
Most abandoned vehicle affidavits require that you keep the vehicle in its original location. By moving the vehicle after beginning the process, the DMV can’t verify if the vehicle was actually found where you said it was, which will void the entire process.
Abandoned vehicles aren’t automatically finders keepers because most vehicles that are called abandoned aren’t actually abandoned. The abandoned vehicle process is intentionally drawn out to ensure that all of the correct owners have been notified. For example, say you go on vacation and loan your car to a friend for the week. If abandoned vehicles were “finder’s keepers”, this person who is in physical possession of your vehicle could claim your vehicle as abandoned on their property while you’re away and retitle it in their name.
As we mentioned previously, this process is often abused. The state’s first line of defense to protect against these fraudulent applications is to reject all of them that come in. If someone is scamming them, they may get scared off. If it’s not a scam, it’s likely to be resubmitted.
Abandoned vehicles are a common concern, often prompting individuals to seek ways to obtain a title for a vehicle they’ve acquired. However, the term “abandoned” doesn’t necessarily mean a vehicle has magically appeared on your property without explanation. In most cases, people claiming a vehicle is abandoned have acquired it through various means, such as purchasing it on Craigslist, acquiring it from a towing company, or receiving it for sale without a title.
Here, we’ll examine an example from the state of Colorado, using their Department of Revenue’s “Abandonment of Motor Vehicles Private Tow Requirements Checklist” to illustrate why the term “abandoned” doesn’t equate to a straightforward process for obtaining a title.
The outlined process in Colorado demonstrates that abandoned vehicles are not simply finders keepers situations. For civilians without tow operator licenses, the ability to declare a vehicle abandoned and initiate this process is limited. Even when allowed, it involves a complex series of steps and requirements.
Alternative Methods for Obtaining a Title: If you’re seeking a title for a vehicle you’ve acquired, there are alternative methods that don’t involve labeling it as abandoned. Options such as surety bond titles, prior owner contact, magistrate titles, and court order titles provide more controlled and legally sound avenues.
Consulting Title Professionals: For assistance in navigating the complexities of obtaining a title, reaching out to title professionals, whether in the title division or the surety bond division, can provide valuable guidance. They can offer insights into the most suitable methods for your specific situation, helping you secure a legitimate title without resorting to the abandoned vehicle process.
In summary, understanding the limitations and complexities of abandoned vehicle procedures highlights the importance of exploring alternative avenues to secure a title legally and effectively.
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