Any used car buyer in his/her sane mind will always be concerned about the title of their prospective buy. A blue title is something that scares a lot of such wise buyers. But what is a blue title?
As we know, there are several kinds of titles given by the DMV for vehicles. For a buyer, knowledge about these titles is very important, and the blue title is one among them. In this story, we will dig our noses deep into this subject with an objective to learn what titles are, and what they mean to you and your car ownership.
What Is A Blue Title?
The answer to this depends on a lot of factors. If you look up videos of used car dealers on YouTube, most of them mention one thing. They receive multiple calls from customers asking if the vehicle they are selling has a blue title.
Even as a well-researched used car buyer, you must be aware of the horror stories people speak about blue titles. But what does it actually mean? Is there a reason to be scared about it? The answer is yes and no.
Well, the impact of a blue title on your vehicle depends on where you live. In the USA, vehicle laws come under the jurisdiction of the states and not the federal government. Hence, the laws vary from state to state, and it is almost impossible to measure them with a common metric.
When most of us hear the word blue title, a salvage title springs into mind. This can be true but not all the time. In some states, it can be quite normal.
For example, in Texas, the blue title can be the clean title for the vehicle. If it is a salvage title in Texas, it will be mentioned in the remarks section of the title. But in many other states, the blue title can be a salvage title, so it is necessary for you to know about it as a car buyer.
For this information, we will need to understand the types of titles and what they mean. Buying a vehicle with a clean title is important if you are not ready to face unforeseen legal and mechanical issues.
So, let us have a glimpse at all the kinds of titles right now. We can also discuss what they mean and how they can affect your ownership experience with the car.
Different Types Of Titles
A title of the car is basically a legal form that establishes the ownership, identity, and condition of the vehicle. Though the laws differ from one state to the other, the general principle remains the same.
If the title of a vehicle is clean, it means that the vehicle does not have an accident or damage reported. The word “reported” is particularly important. Why is it important? We will circle back to it once we learn what a clean title is.
1. Clean Title
As we know, a clean title means that the vehicle has no reported accidents or damage in its past. People look for a clean title while buying a vehicle as it comes with a certain peace of mind. But is it really worth the attention being put into it? Broadly, yes.
In Texas, a blue title is a regular title you get with a vehicle. The DMV prints out the certificate as a blue title, which literally has blue edges on it, hence the name. But irrespective of the state, a clean title is especially important, blue, or not.
Sustaining a clean title requires years of careful driving and diligent care. It also means that the car has not had any reported accidents that commanded a colossal repair. Certain dings and scratches are fine. They do not take away the clean title, but major accidents do.
So, if your new buy comes with a clean title, you can believe that it is a good buy. It can also ensure that the vehicle may not give you any surprises down the road. Like many facts, there are exceptions here as well
But a clean title is not an assurance of quality. It is a legal document that says that the vehicle has not been in an accident that the insurance knows of. It is not a certificate that guarantees flawless mechanical operation. Let us look at a few things that a clean title cannot guarantee.
a. Mechanical Imperfections
It is a no-brainer that you have to thoroughly inspect a vehicle before putting down your money for it. It will be plain stupid not to do so. Having a clean title does not guarantee a smooth operation.
With age, the car may have developed a number of issues under its skin. Without a thorough inspection, you will never be able to spot it. So always inspect the vehicle with an OBD II scanner as well as a trained eye. If your eye is not trained enough, get a mechanic to do it. You can also opt for trusted car buying sites like Carvana, CarMax, or Vroom that puts these cars through a rigorous inspection schedule. They also offer a warranty.
So do not equate a clean title or a blue title in Texas to a mechanically perfect machine. Things can still go wrong. A clean title is good but not the only thing you should look at.
b. Unreported Accidents
Even if the title is all squeaky clean, you still must worry about a few things. It is a possibility that the owner had an accident before and instead of contacting the insurance, did a shoddy repair job and put it up on sale with “Accident-free, Clean Title” in its ad description.
Nowadays, most insurance companies consider cars to be salvaged even after seemingly small accidents. With parts and labor costs soaring up in the sky, this is the best choice for them for the minimal financial burden. So instead of giving money to the owner to repair the vehicle, they will buy back the vehicle at the cost agreed in the policy. This vehicle will be resold as a salvage vehicle in auctions with a salvage title.
But some customers try to avoid this by repairing the cars themselves in the cheapest way possible. As the insurance company does not have any information, this may not impact the title in most states. Hence, the car can go on sale with a “clean title” but with an accident history.
Websites like Carfax can provide you with reliable accident history of the vehicle. If you suspect a car to have an accident history but a clean title, you can use services like this to make sure that it is as clean as it looks. But even then, if the repairs are done in a local garage or even at the owner’s home garage, you are most likely not going to know. Here, the trained eye comes into play and that is the only way you can spot damage.
c. Title Washing
We are nearing illegal territory here. Many owners who have received a salvage or rebuilt title for their cars end up doing a maneuver called Title Washing. This is illegal in many states as it is covering the eyes of the buyer and fooling her/him.
Criminals resort to such an illegal move as the cars fetch more value when it has a clean title instead of salvage or rebuilt one. The amounts people get fooled by can reach up to thousands of dollars and this is definitely a con act.
People do Title Washing by transferring a vehicle with a salvage brand in its title to another state where the salvage brand is not recognized. This means that once relocated, the vehicle will have a clean title from the new state. Hence, any unwary buyer can be easily fooled.
This is where info about the blue title comes into the picture. If a vehicle has a blue title in Texas but with a salvage brand on it, they can relocate to another state for a clean title.
But it is easy to uncover this scam. The salvage brand in the previous title was already recorded by the insurance. A simple Carfax search by VIN can dig out those reports for you. Stay away from these fraudsters when you are looking for a used car.
2. Salvage Title
If you are looking for a used car and you bump into a vehicle with a salvage title, what do you do? In the first place, special auctions sell salvage cars. Here the customers are completely aware of the condition of the vehicle. The auction also details the exact issue that brought in the salvage brand in its title to them.
But what does a salvage brand in a title actually mean? Let us say that a vehicle has met with an accident. It can be as small as riding over a large speed bump and damaging the underbody. It can be as big as a good shunt that damages the bumper, radiator, headlights, and some other parts.
But the total structure of the vehicle should be completely intact. The vehicle should be safe to hit the road after a good repair job. If it is completely totaled, and cannot be repaired, it will be branded totaled, or junk and cannot be used on the road.
But in the case of salvage cars, the insurance thinks that it is possible to repair but it costs too much. The amount of money the repair process demands does not justify the value of the car. So instead of taking this heavy damage, the insurance company gives the salvage value of the vehicle to the owner.
They then sell it to a salvage dealer and recover some bit of the cost. The dealer sells it at auctions with a salvage title. Of course, they can cost way less than what you may have to pay for the vehicle with a clean title.
The person who buys these cars at a lower cost can choose to repair them and use them. This is where the next type of title jumps into relevance.
3. Rebuilt Title
While the blue title may mean salvage in some states, it means all clear in some others. The rebuilt title on the other hand basically marks the rebirth of a salvage vehicle.
Once a vehicle meets an accident, its insurance provider will calculate the amount of money needed for the repair. If it will cost a lot of money, more than the actual worth of the vehicle, the company will decide it to be a salvage vehicle, as we know.
Once some repair shop or someone who knows their way around cars buys this vehicle, they may rebuild it themselves. While the insurance companies consider the repair cost from a branded showroom, these guys will be able to do it for a lot less. They also get the vehicle at the auction for a lower price, making it a sweet deal for them.
After repairs, the vehicle will have to go through an inspection by a government-authorized testing center. Here, this vehicle must pass a thorough safety inspection before it can ply on the road. Once it clears the test, the title gets rebuilt or reconstructed branding.
This allows the next buyer to understand the past of the vehicle. The fact that the vehicle was damaged and repaired may deter some of the buyers from it. On the flip side, the cheaper price tags that these cars come with can be attractive.
So, it is completely down to the discretion of the customer to buy a rebuilt car. Paying more for a clean title is one option or paying less for a car with a possibility to develop issues, later on, is another one.
4. Flood Damage
In some states, flood or water damage will be specifically mentioned in the title. In Texas, the regular blue title will have flood damage written in them if the vehicle has a reported flood damage history.
Buying a flood-damaged car can be quite a leap of faith. In these vehicles, the probability of something failing later is high. But the cost you pay for these vehicles are going to be lesser than a vehicle with a clean title.
5. Altered Odometer
If you are even remotely familiar with the used car market, you must know that a car’s mileage is important. The value of the vehicle greatly depends on the miles it has run. The wear and tear associated with these miles can eat into the life of the vehicle.
Some sellers, frauds in one word, tamper with the odometer to reduce the mileage. This is quite a widespread practice, more common than you may think. According to the National Highway Traffic Safety Administration, more than 450,000 vehicles every year sell this way.
The mileage shown by the odometer may sometimes be lesser than what it has actually done. This is a clear case of fraud. In this case, the title will have an “altered odometer” or “odometer rollback” title.
6. Lemon Title
Lemon laws differ from state to state. These are in place to protect customers who have bought vehicles that came with defects, right from the factory.
For a vehicle to be a lemon, there are a few requirements. A certain part of the vehicle may have broken repeatedly when the vehicle was under warranty. There may be a defect that makes the vehicle unsafe for the passengers as well as other road users. These are all conditions that warrant a lemon title.
The manufacturer of these vehicles gets a chance to repair these manufacturing defects. But if they occur again, the vehicle title is going to be branded a lemon.
The lemon laws vary from state to state. In some states, it does not even exist. So, when you are buying a vehicle but it has a lemon title, prepare for a surprise.
Buying A Car With Blue Title
After knowing what a blue title is, it is now essential to know what it is like to live with a vehicle that has a blue title. In states like Texas, the blue title has the proper odometer reading and no branding, it is completely normal. It is a clean title, and you drive your vehicle around just like every normal vehicle.
But in states where a blue title means salvage vehicle, there are a certain few things you must take care of. First off, when buying a salvage or a rebuilt vehicle, you should know the problem that attracted the blue title. If you rebuild the vehicle yourself, it gives you more assurance of quality as you know what went into it.
But if it is rebuilt by someone else and you buy it with a rebuilt blue title, it is different. You should be a bit cautious with this vehicle. You should not buy it unless you are well aware of what went wrong with the vehicle. The details of the repair work done should also be a piece of bonus information.
Pros Of Buying A Vehicle With Blue Title
Lower price. That is the key element attracting buyers to these vehicles. You end up paying a lot less than what you may have to pay for the same vehicle with a clean title.
Some people may get lucky and end up with a rebuilt vehicle with minimal damage. But some others may not be that lucky. Frankly, buying a blue title vehicle with salvage or rebuilt branding has more cons than pros.
Cons Of Buying A Vehicle With Blue Title
Some people who buy these vehicles may end up with a vehicle that harbors multiple mechanical defects. Only a close inspection can help you stay away from this mess.
Financing these vehicles may also be a lot more difficult. Most financiers play it safe and finance only cars with clean titles. If you do find a financier ready to play the gamble, they will ask for higher interest rates
Similarly, insurance is going to be another pain to find. Insurance companies do not entertain vehicles with branded titles. You may have to go on a little hunt to find the perfect insurer.
Reselling your car is another time the blue title with salvage or rebuilt branding becomes a pain. Most buyers prefer not to buy a branded title car, hence dropping its value even further.
Final Verdict About Blue Title
You can buy a vehicle with a blue title with salvage or rebuilt branding. Researching well about the condition of the car as well as known defects of the model prior to the purchase can help you here.
For example, the Chevy Traverse is a reliable crossover. But this has not always been the case. The 2010 and 2011 Chevy Traverse came riddled with issues that drove people crazy. A rebuilt car from this year will only make matters worse.
Doing your research before your purchase is inevitable. But when you are buying a vehicle with a blue title with salvage or rebuilt branding, prepare for additional repairs. You are going to save some money when you buy these vehicles due to their branded titles. But keep some of it aside for additional repair if they pop up.
Who knows, you may be lucky to find a vehicle with a branded title but with no catastrophic damage. Dents, broken headlights, bumpers, fenders are all replaceable parts and do not compromise the bodyshell integrity or mechanical condition. But if you suspect damages deeper than that, it is better you keep looking.
Severe damage to the mechanical components like the radiator, engine, transfer case, control arms, wheels, and suspension demand expensive repairs. They can also completely alter your ownership experience, for bad.
The blue title may not be such a terrible thing if you know for very well how to find a sweet deal. But if your scrutiny is not adequate, you can end up in a mess that is hard to wriggle out of. After all, buying a salvage title or a rebuilt title car is still a gamble.
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