Vehicle title branding

Vehicle title branding is the use of a permanent designation on a vehicle's title, registration or permit documents to indicate that a vehicle has been written off due to collision, fire or flood damage or has been sold for scrap.

The designation or brand is mandatory in most provinces and states in North America when an insurer or vehicle owner writes off a vehicle as a "total loss". Typically this means the cost to repair the vehicle would equal or exceed the car's value, although legal definitions vary.

Objectives

The title branding programs typically have two objectives:;A deterrent to auto theft:If a vehicle is a complete loss due to an accident, its serial number (VIN, vehicle identification number) and registration documents are still of potential value to persons dealing in stolen cars. There is a risk that a smashed vehicle will be repaired using stolen parts if new, aftermarket or used parts to make the repair would cost more than the vehicle is worth. There is also the risk that the serial number of an accident vehicle will be switched with that of a stolen vehicle of the same make and model/year, so that those in possession of the stolen vehicle may attempt to register it as a repaired accident car and drive or sell it.;A consumer-protection warning:Cars which have been involved in serious collisions often find their way into auctions and onto dealer's lots. A permanent record of a severe accident warns potential subsequent owners that a car has been damaged (and possibly repaired). Properly repaired and carefully inspected, the vehicles may be good - but an improper repair after a serious accident may leave the vehicle frame, body or key electrical and mechanical systems in damaged or unroadworthy condition.

Mandatory vehicle branding

In North America, the vast majority of vehicle licenses are issued by individual provinces/states and territories. Most have implemented some branding scheme to warn subsequent owners of a vehicle of severe damage to a vehicle due to collision, theft or disaster. The brands and the criteria used to assign them vary widely from one jurisdiction to another.

Typically, these include some variant of:

With the exception of 'salvage' (which is replaced by the 'rebuilt' brand after repair and structural inspection), the brands are permanent. Once a vehicle identification number has been associated with one of these brands, it will not be removed by authorities in that jurisdiction or in other jurisdictions with similar vehicle branding laws.

Unfortunately, there is no consistent list of brands or of conditions under which they apply. What most US states call "junk" and most Canadian provinces call "irreparable" («irrécupérable») can be labelled "salvage" in some other jurisdiction - either because the criteria are different or because the same brand has been confusingly been given a different name. In Alberta only, "salvage" is used to mean irreparable - in most other jurisdictions, "salvage" means that the vehicle can indeed be repaired but that the cost of doing so is most likely prohibitive.

Issues and limitations

In North America, vehicle licenses are normally issued by individual provinces and states. Each operates under different regulations.

In some cases, the criteria to define a "total loss" vary - some base the cutoff amount on the nominal value of the vehicle in working condition, others look instead at the value of a working vehicle minus the value of a collision vehicle as scrap, salvage or parts. The percentage of the original value at which the "total loss" label is applied also varies.

These differences are sometimes exploited by schemes such as "title washing", in which a vehicle branded as 'junk' in one jurisdiction is registered in another, moving from state to state until one state with slightly different regulations brands the same vehicle as 'salvage' but repairable. A vehicle with Arizona registration and a 'salvage' title for salt water damage would, for instance, represent a red flag as a vehicle possibly once owned by a little lady from New Orleans named Katrina. Vehicles with salt water or hurricane flood damage often have severe corrosion and electrical problems which cannot be properly repaired, so are best avoided.

The system also depends on the insurer or the owner of the damaged vehicle to provide information needed to determine the cost of damage to apply the brand to title, despite the fact that doing so will further reduce the vehicle's remaining resale value. Costs estimates are widely variable; if one estimate is based on factory-new parts, another on new aftermarket parts and yet another based on junkyard parts, the numbers will vary widely - with further variance added based on who does the repairs. Damage to automotive unibody frames (commonly used in most cars since 1967 to save weight) requires special expertise and equipment to measure, with factory tolerances typically as tight as 3 mm (1/8").

While some vehicles (such as cars exported overseas after severe collision or damaged before the introduction of mandatory branding) may carry no warnings as to their history, others may be branded as "total loss" when they could have been quite repairable in the hands of someone willing to install used parts and do the work at a more modest price. Insurance companies have even been known to declare an older vehicle a total loss due to a rock chip in the windshield, as the cost of a professional windshield replacement exceeds their percentage of their valuation of the vehicle.

If a vehicle is branded as 'junk' or 'irreparable' in error, or importation paperwork indicates it as imported 'for parts', there may be no straightforward means provided in legislation to remedy these errors. These vehicles, if not exported to another jurisdiction with different regulations, will never be registerable or licensed again - even if all needed repairs are made and verified.

See also

* Lemon (automobile)
* Used car
* Carfax (company)

External links

* List of Vehicle History Services
* [http://www.arkansas.gov/dfa/rules/mv1995_4.pdf Arkansas - Damaged vehicle title regulations]
* [http://www.revisor.leg.state.mn.us/stats/325F/6642.html Minnesota title-branding legislation]
* [http://ag.ky.gov/cp/usedcar.htm#Salvaged,%20Rebuilt,%20Water%20Damaged%20Motor%20Vehicles Kentucky legislation]
* [http://www.nydmv.state.ny.us/broch/c18.htm NY Department of Motor Vehicles]
* [http://www.mto.gov.on.ca/english/dandv/vehicle/branding/ Ministry of Transport Ontario]
* [http://www.dot.wisconsin.gov/safety/consumer/index.htm Wisconsin Department of Transport consumer protection info]
* [http://www.ftc.gov/bcp/lemon/ US Federal Trade Commission Vehicle buyback disclosure project]
* [http://www.nicb.org/ National Insurance Crime Bureau]
* [http://cbs5.com/seenon/local_story_026234416.html Used cars hiding flood damage, CBS 5 San Francisco]