What Does a ‘Clean Title’ Mean in Used Cars?

A car title is a legal document that your local motor vehicle office issues to the legal owner of a car. It holds a record of the car’s ownership, history, accident record and more. A clean title means that the car has never been in a significant accident that would qualify it as a total loss. It is illegal in all 50 states to sell a vehicle with a rebuilt or salvage title without letting the buyer know. Any collisions, natural disasters and more should be part of your car’s history. That doesn’t mean, however, that the car has never been in an accident at all. While the term clean title suggests a lack of significant issues, that is not always the case. A clean car could still have significant defects, subject to factory recalls or be a lemon. You would still have to do extensive research on the vehicle before purchasing (like running the VIN through CARFAX or similar resources to look for a history of accidents). It can pay off significantly to have a professional mechanic take a look at the vehicle before purchasing it too. Keep reading to protect yourself.

On This Page

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  What Types of Title Brands Are There?

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  What Is Title Washing and How Is it Related to a Clean Title?

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  Can Clean Title Cars Have Issues or Serious Problems?

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  What To Look for When Buying a Car With a Clean Title

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  How Can a Clean Title Car Affect Insurance?

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  FAQs

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  Buying a Used Car?

What Types of Title Brands Are There?

Your vehicle’s title will reveal most of what has happened to it throughout its life. A branded title indicates significant damage that should be considered.

• Salvage — This means the vehicle has been deemed a total loss due to extensive damage. Until the car has been rebuilt, it is not considered roadworthy and cannot be legally driven.
• Rebuilt — Once a car is salvaged and repaired, it gets a rebuilt title that shows it is roadworthy again. If your car has a salvage title, you’ll have to take it to your state’s DMV to get a rebuilt title. Rebuilt cars can still have massive underlying issues and can be costly to insure.
• Lemon — This can vary from state to state. Typically, a lemon refers to a car that has a malfunction or significant defect that makes it unsafe to drive.
• Irreparable Title — This title for a car indicates damage by a natural disaster like fire or flood, and the car cannot be repaired. Junk or scrap titles are comparable.
• Junk Title — Vehicles with a junk title can only be sold for scrap and parts and are not drivable.
• Fleet —  Working cars that were part of a fleet (taxis, cop cars, company cars or rentals).
• Flood/Water Damage — Vehicles with massive water damage after a rainstorm or a flood have this type of title. Water damage can create mold, electrical issues and other problems that are complicated to repair.
• Odometer Rollback — Vehicles with a tampered odometer show a mileage that cannot be trusted and probably have many more miles on it.

While the term clean title suggests a lack of significant issues, that is not always the case.

What Is Title Washing and How Is it Related to a Clean Title?

Title washing is a fraudulent activity that seeks to hide titles. Unscrupulous vehicle sellers will try to sell a badly damaged car by title washing.

• Criminals may physically change paper documents (car titles) to hide their true title brands.
• Each state has its own title branding laws. If you move to a state that doesn’t recognize the specific brand of your title, it may be removed from your title.
• Some car owners will reapply for a new car title. If they fail to disclose information in the past while applying, the new title will not reveal a previous title.

Prospective used car buyers should have the vehicle thoroughly checked out by a trusted mechanic. A professional mechanic should be able to spot past damage.

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Title washing is a fraudulent activity that seeks to hide accident and damage history.

Can Clean Title Cars Have Issues or Serious Problems?

Yes, just having a clean title doesn’t preclude serious issues with a car. See what kinds:

Clean Title Vehicles With Problems

Mechanical

Clean title vehicles may have multiple mechanical issues from leaking transmissions to engine failure. There is no guarantee that buying a car with a clean title will save you from spending money on repairs.

Bad Repairs

Clean titles can hide badly done, sloppy mechanical or electrical repairs. A car owner could attempt to repair electrical problems, fire and smoke damage or accident destruction on their own, or they could pay someone under the table to avoid filing an insurance claim that will impact their premiums. Hidden repairs won’t show up on the car title status. However, a good mechanic should be able to spot these illegal repairs right away.

Minor & Major Accidents

Some clean title cars may have enough cosmetic repairs to hide thousands of dollars of undone repairs, like structural or frame damage from minor or major accidents.

Expect to have reduced coverage and higher premiums if you insure a rebuilt vehicle.

What To Look for When Buying a Car With a Clean Title

Drivers may falsely assume that clean title cars mean zero issues. While this can be true at times, it is also true that clean titles can cover up severe issues. It is essential that you look up the car history report (many drivers use CARFAX). The best way to ensure that the used vehicle you are purchasing is safe is by paying a professional and certified title to inspect the vehicle. A few hundred dollars now can save you thousands of dollars in future repairs.

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How Can a Clean Title Car Affect Insurance?

While you don’t need a clean title to get car insurance, you should expect to have reduced coverage and higher premiums if you insure a rebuilt vehicle. When a rebuilt car has an accident, it is hard to determine if the damage to it was already there or caused by a recent event, which is why insurers prefer clean titles. While many insurance companies will grant liability coverage for rebuilt motor vehicles, very few will offer full coverage. There may also be pay-out limits. Therefore, unless you are getting an incredible deal with a branded title, you should seek out clean title cars. You won’t pay as much in insurance premiums and you’ll be able to apply for full coverage. Since all insurers are different, you should still shop around and compare quotes, since multiple factors can affect your insurance rates.

Buying a Used Car?

If you’re looking for a car insurance company that provides the cheapest rates without giving up too much coverage, SmartFinancial can help you find an insurer for you. Just type your zip code below and answer a few questions to gain access to the most affordable insurers. In just minutes, you will compare several rates from several insurance agents in your area for free.