Avoid These Common Used Car Scams: Title-Washing
When an insurance company considers a car a total loss because of serious damage that makes repairing it too expensive relative to the car’s value, it will end up with a “branded” title (such as salvage, rebuilt, irreparable, junk, and so on). The problem is that each state has its own ways of naming different brands that can go on a title. When the laws and definitions about describing a car’s condition differ substantially from one state to another, the brand of one state might just drop off entirely in another state.
Unscrupulous sellers will purchase a vehicle with a branded title for very little money, then they will repair it, take it to a different state, and have a new title issued that comes out “clean” because the state has different laws and definitions and doesn’t recognize the title’s previous brand. It has essentially been washed clean of any negative branding. You’ll notice that the vehicle in question has been repaired, but since these are scammers looking to make a quick buck, you can bet that the repair work was shoddy and cut lots of corners, leaving the new unsuspecting owner at risk for major headaches down the road, possibly even danger if any of the problems were safety-related.
Estimates say there are as many as 800,000 vehicles out there on the roads right now that would show evidence of title-washing. Here’s how to protect yourself:
Vehicle history report. A good vehicle history report from CARFAX or AutoCheck follows the title information throughout the life of a vehicle, whether its current title has been washed or not, so if it had a branded title in a different state, this should show up on the report. However, history reports aren’t perfect, so some do still slip through the cracks. And it’s also possible to switch VINs on vehicles to further hide a car’s true history, but that’s another scam for another day.
Careful who you deal with. Another remedy for this type of scan is to make sure you buy used cars only from reputable dealerships. Find a great dealership you can trust and you will never have to worry about these kinds of scams.
Get the laws changed. Contact your state legislators and demand tougher laws around branded titles. If a vehicle had a branded title in one state, potential buyers in a new state should be informed of that. It shouldn’t be possible to wash any branded title completely clean. Consumers have a right to know a vehicles entire true history.
Have the car inspected. As we’ve recommended on many occasions, any time you’re buying a used car (unless it’s from a dealership in which you can wholeheartedly place your trust), you should have it thoroughly inspected by your trusted mechanic who can tell you if there’s anything wrong with it, including any repair work done in the past that was shoddy or not done correctly.
The sad thing is that most consumers never become aware of this until they go to sell or trade the car in, at which point they find out about the previous brand and suddenly can’t get nearly as much for the vehicle as they had hoped.
These are other common used car scams you should know about: