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 undrivable. 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.