What Is a Clean Title and How Does It Affect Insurance?

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Clean title: man inspecting his car

The title is one of the most important things to investigate when buying a used vehicle. Not only is a car title an important legal document that identifies the legal owner of the vehicle, it may also contain information about the current condition of the vehicle.

A clean title vehicle is usually a safer bet than a salvage car with a branded title. But just because a used car has a clean title doesn’t mean it hasn’t been in an accident. Minor accidents may not be reflected on the title, and unscrupulous dealers may engage in “title washing” to cover up a checkered vehicle history.

That’s why it’s important to look up the vehicle history report and have the car inspected by a trusted mechanic if there are any concerns.

Here’s everything you need to know about what a clean title means and how much of a difference it makes when it comes to getting car insurance.

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What Is a Clean Title?

Most cars start out their life with a clean title issued by the state’s Department of Motor Vehicles (DMV). When the car is bought or sold, the title is transferred from the current owner to the new owner — unless you’re leasing or financing the car, in which case the lender or lienholder will be listed on the certificate of title.

In most cases, a clean title car will retain a clean title unless it gets into a major accident or suffers other severe damage. If the insurance company writes it off as a total loss, it will end up a salvage title or a branded title instead.

The good news is that if you go to a used car dealership and are shown a clean title, you can be reasonably confident that it isn’t a salvage vehicle. However, that doesn’t mean it hasn’t been in any accidents or is free of any problems at all. There are plenty of ways in which a car might be damaged while still maintaining a clean title.

You’ll need to double-check the vehicle identification number (VIN) or request a Carfax or AutoCheck report to make sure there isn’t anything being covered up.

Clean Title vs. Other Types of Titles

Happy woman holding her car key

What happens if you go to a car dealership and find out that the car you’re considering doesn’t have a clean title? Is it still worth buying, or should you look elsewhere?

In general, we don’t recommend buying a salvage vehicle if you’re looking for a good deal on a reliable car. However, if you’re a hobbyist who likes to fix up cars for fun, or are willing to take your chances on a salvage vehicle, it could be worth a look.

Here’s what you need to know about clean titles vs. other kinds of titles:

Salvage Title

A salvage title vehicle is a damaged vehicle that has been written off as a total loss by the owner’s insurance company. That means the total cost of repairs was estimated to be more than the value of the vehicle — not a good sign!

A vehicle with a salvage title may not be roadworthy and you’ll need to invest a lot of your own money into repairs before it’s safe to drive.

Sometimes, a vehicle may be written off after it was stolen. In this case, it may have simply been stripped for parts and may not have any major issues. Still, it’s usually worth getting a second opinion to make sure there isn’t any significant damage.

A handful of states, including New York and New Jersey, are known for having lax state laws around salvage vehicles. Other states have laws that require the seller to disclose salvage title information to buyers, as well as “lemon laws” to protect buyers who drive home with a vehicle that turns out to have undisclosed flaws.

Rebuilt Title

Another type of title that you might encounter is a rebuilt title. This is what a salvage car receives after it’s repaired and deemed roadworthy again.

If you’ve bought a car with a salvage title, you’ll need to take it to your state’s DMV once it’s repaired to be issued a rebuilt title.

A car with a rebuilt title is a safer bet than one with a salvage title, but it may still have underlying issues to address and it may be difficult to insure.

Branded Title

The term branded title is actually an umbrella category that includes rebuilt titles and salvage titles — basically, any car that doesn’t have a clean title.

In some cases, a car might have a branded title because it was previously used as a taxi or police vehicle, or manufactured for a non-U.S. market.

Other branded titles may be issued because of water damage, flood damage, or fire damage. Another common reason a car might have a branded title is an odometer rollback, in which case the true mileage of the vehicle isn’t known.

You’ll need to check the car’s history to find out whether it has extensive damage or simply minor issues that are worth repairing.

Do You Need a Clean Title to Get Insured?

As you can see, a car with a clean title is usually a safer bet than a salvage vehicle. It may not be in perfect condition, but it’s legally roadworthy and you won’t have to deal with expensive repairs and other headaches to get a rebuilt title from the DMV.

But what about auto insurance? Do you need a clean title to get insured? The short answer is no: You don’t need a clean title to get auto insurance, but you can expect higher premiums and reduced coverage if you try to insure a rebuilt car.

Many insurers will offer liability coverage for rebuilt cars, but it may be hard to find an insurance company that will offer you full coverage. They may also stipulate limits on how much they’ll pay out if you get into an accident and file a claim.

That’s because it can be hard to know whether or not any damage was caused by a recent accident or was actually there all along.

Unless you have a good reason for buying a vehicle with a branded title, most drivers will be better off with a clean title car. You can expect to pay less to insure it, and get more comprehensive coverage if you get into an accident.

Still, you’ll want to compare insurance quotes in advance, since every company has its own policies, and there are plenty of other factors that can impact your premiums.

Find the Best Insurance Rates for Your Vehicle

Happy man inside his car

Whether you’re thinking of buying a car with a new title or a rebuilt one, it’s worth taking a look at your insurance options before you drive it home. After all, the purchase price is just one part of vehicle ownership, so knowing what you can expect to pay in monthly premiums can help you decide which car to buy.

A used car with a clean title may cost more upfront than a salvage vehicle, but you may end up paying significantly less in insurance each month.

Our comparison tool makes it easy to compare rates from multiple insurance companies in one place. Just enter your ZIP code below to get started:

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