In Michigan, an "orange title" isn't an official designation used by the Secretary of State. The term is colloquially used to refer to a vehicle title that has some sort of issue or imperfection, requiring additional steps to fully register or transfer ownership. This often indicates a problem with the vehicle's history, potentially impacting its value and insurability. Let's break down the various scenarios that might lead to a title being informally referred to as "orange" and what that means for buyers and sellers.
What Problems Might Lead to a Vehicle Having an "Orange Title"?
While there's no official "orange title" in Michigan's system, several issues could lead to a title being considered problematic, thus earning the informal label. These problems often involve:
-
Salvage Titles: This is a common reason for a vehicle to be informally considered to have an "orange title." A salvage title indicates the vehicle has sustained significant damage, often exceeding a certain percentage of its value, and has been declared a total loss by an insurance company. These vehicles require specific procedures for re-registration. The title itself is usually branded as "Salvage" or similar.
-
Reconstructed Titles: If a vehicle with a salvage title has undergone significant repairs to restore it to drivable condition, it might receive a reconstructed title. This title still reflects the vehicle's past damage but indicates it's been deemed roadworthy after inspection. Again, this often leads to the informal "orange title" label.
-
Flood Damage: If a vehicle has been significantly damaged by floodwater, its title might reflect this damage, potentially earning it the informal "orange title" label. Even after repairs, the potential for hidden problems remains.
-
Issues with Ownership: Problems with accurately establishing ownership, such as missing paperwork or disputes, can sometimes lead to complications in titling, and might result in the informal use of "orange title."
-
Lienholder Issues: An outstanding lien on the vehicle—where a lender still holds a claim on the vehicle—would not necessarily result in an "orange" title, but it would certainly complicate the transfer of ownership. While the title itself might not be "orange," the situation could easily lead to the use of this term.
How to Check a Vehicle's Title History in Michigan?
Before purchasing a used vehicle, it's crucial to verify its title history. You can obtain a vehicle history report from various providers, which often reveals significant information about accidents, salvage history, and other potential problems. This is far more reliable than relying on informal terminology. Don't solely rely on the informal "orange title" designation; verify the specifics on the title itself.
What Does an "Orange Title" Mean for the Value of a Vehicle?
A vehicle with an issue that leads to the informal "orange title" designation will generally be worth significantly less than a comparable vehicle with a clean title. Insurance companies may also charge higher premiums, or even refuse coverage, for vehicles with these histories.
Is it Legal to Sell a Vehicle with an "Orange Title" in Michigan?
It is legal to sell a vehicle with a salvage title or reconstructed title in Michigan, provided all required procedures and disclosures are followed. The seller must clearly disclose the vehicle's history to the buyer. Failure to do so can have significant legal repercussions.
This information is for general guidance only, and it's crucial to consult official Michigan Secretary of State resources for the most accurate and up-to-date information on vehicle titling and registration.
