Every state has a lemon law giving buyers a remedy when a new vehicle has a substantial defect the manufacturer cannot repair within a reasonable number of attempts. When the manufacturer buys the vehicle back, many states require the title to be branded.
What counts as a lemon differs by state, as does whether the brand is required at all. A buyback in a state with no branding requirement can end up with a clean title.
A buyback vehicle is not necessarily a bad car. The defect is sometimes fixed properly after repurchase. But you are buying a vehicle with a documented history of a problem serious enough that the manufacturer gave up on it.
Why it matters
You need to know what the original defect was and whether it was ever resolved. Without that, you are inheriting an unknown.
How to check it
Ask the manufacturer's customer service line what repair orders exist against the VIN, and look for the original complaint in the service history.
Does this apply to the car you are looking at?
Run the VIN or plate and see what is actually on record.
Related terms
Definitions are general guidance, not legal advice. Title rules, total loss thresholds and inspection requirements are set by each state and change over time, so confirm the position with the motor vehicle agency for the state the vehicle is titled in before relying on it.