Before You Buy a Car - Important Advice about Salvage Titles

Valid Use of Salvage Title Vehicles Crashed or flood-damaged vehicles which have been issued a salvage title may be legally purchased at auction or from a junk yard and restored to drivable condition. Because of the stigma of the salvage title, these vehicles are usually purchased at a low price. Some amazing bargains are out there, just waiting for the alert restorer who knows a deal when he sees one. A knowledgeable mechanic can restore and resell this vehicle at a pretty profit after the vehicle passes inspection and is issued a "Rebuilt" on "Reconstructed" title, making it perfectly street-legal. What is a Salvage Title? When a car is severely damaged, either by accident, flood, or other cause, the owner's insurer may deem it beyond repair and undriveable. At that point the state where the vehicle rests issues it a salvage title. To legally drive the vehicle again in that state, the new owner must make the car roadworthy and pass a fitness inspection. Millions of vehicles are issued salvage titles yearly, thousands of those are resold legally, and not surprisingly, many are resold illegally. Salvage Title Fraud - Consumer Alert People purchasing late-model used cars from private sellers may be seriously injured or killed. People looking for low-mileage used cars off a car lot may be overcharged thousands of dollars. The cars they buy from the private seller or used car dealer may be seriously unsafe, or priced thousands above their true value, or both. The risk that these people need to know about and protect themselves from is called title fraud. Illegal Use of Salvage Title Vehicles One way that bad guys take advantage of the inconsistent way state law-enforcement agencies maintain title records and communicate with each other, is to sell a vehicle with a salvage title to an unsuspecting victim in a different state at close to new car prices. Since state agencies don't consistently communicate title data with each other, a car with a salvage title in one state can have a clear title in another state. This paves the way for a lot of illegal activity that can result in selling cars with dangerous mechanical problems, or selling a car with a phony clear title for a lot more money than it is really worth bearing a salvage title. The most common unforeseen hazards are in vehicles with bent frames that cause improper tire wear and dangerous handling behavior. Laws Pertaining to Salvage Titles State authorities, as well as watchdog groups such as the National Automobile Dealers Association (NADA), are striving to close loopholes in the law that allow chop shops and other illegal entities to rip off and endanger unsuspecting buyers. Their legislation (S. 3707) to force insurers to post salvage title vehicle's info in a way that the public can access is currently under review. Buyer Beware With new car prices as high as they are, an alert and talented mechanic can acquire vehicles with salvage titles, rebuild them and make a sizable profit, legally and aboveboard. With equal ease and resourcefulness, dishonest mechanics can deceive and defraud unsuspecting buyers. Buyers cannot afford for state lawmakers and insurance companies to catch up with dishonest car shops. Making sure the proper VIN number on your paperwork is the same as the one stamped on the vehicle and checking VIN numbers with agencies like Carfax will alert buyers to any major damage to vehicles. Armed with the knowledge that these thieves are out there, and the methods they employ, car buyers can make safe and intelligent choices in the used car market.
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By Lindsay Kaplan