Dealer Fraud

Title washing scam results from the lack of a unified law regulating vehicle documentation in all the states. Title washing is used by car owners to “erase” the vehicle’s bad history in order to conceal from the buyer that it had a salvage title because of flood, severe accident or other damage. Title washing incidents increased after hurricane Katrina when many car dealers got stuck with excess of flood-damaged vehicles. Title washing is also frequently applied to “clipped” vehicles with the back and front coming from different cars, or rather of what was left of them after a crash.

The process of title washing is very simple. Here is how it is done. A car that is totaled by the insurance company is given a salvage title, which is often called “branding”. Then it can be repaired and resold with a low resale value. So, the car is transferred to states that don’t recognize the current title and assign it a new, clean tile. Title washing erases the branding and the car’s sale value rises again. Remember that title washed vehicles are sold not only by dealers but by individuals as well.

To avoid becoming a dealer scam victim perform VIN number check and get vehicle history report to reveal the truth about the car’s title. Once a car is assigned a salvage title this information is added to the computer database of services that provide vehicle history reports. These records remain in the database even when the car is transferred to other states.

VIN number check will protect you not just from title washing but from many other used car flaws, for example odometer rollback, salvage title or a flood damaged car.

A salvage vehicle is any motor vehicle which has been wrecked, destroyed or damaged to the extent that it is declared a total loss by the insurance company or, in the event an insurance company is not involved in the settlement of the claim, sustains damage in an amount exceeding 75% of its actual retail cash value. There are some steps you may take to protect yourself from buying salvaged vehicles that have extensive water damage.

Many people may not realize they have bought a flooded car until they take it to an insurance company. They then find out that their agent cannot even issue them an insurance rate quote because of the salvage title on the vehicle. Since used cars are usually sold “as is” there is very little recourse the buyer has at this point other than to try and get the vehicle road-worthy and go through a long inspection process with the state motor vehicle bureau that is required for a vehicle with a salvage title.

One of the easiest ways to protect you from buying such a car is to obtain a vehicle history report from a firm like CARFAX which tracks flooded vehicles and other types of damage. You may also do some detective work yourself on the vehicle if you have any doubts. Look inside the engine compartment and look for any water mark signs that might indicate high water levels. Next, look under carpeting to see if there is mold or any presence of water staining. Finally, inspect the electrical system thoroughly. This is where most water problems show up first.

So to protect yourself from purchasing a flooded vehicle you should be a diligent consumer. If case you have already been defrauded by car dealers, try to find an experienced dealer fraud attorney for help and advice.

Purchasing a pre-owned vehicle may be a difficult task, especially if you do not know which used cars to avoid. There are certain steps that consumers should know to avoid becoming a car dealer fraud victim.

Step 1

Check Consumer Reports before purchasing any vehicle. Consumer Reports contains valuable information on the reliability of new and used cars. They contain evaluations from both the car experts and everyday drivers. Search by the vehicles’ year, make and model. Read each evaluation carefully and check the used car’s overall rating.

Step 2

Go to a private party or dealership and test drive the vehicle. If you are not sure what to look for, have someone come with you who has a good idea of the vehicles components. Check the basic functions of the car to make sure they are in working order. If you do not have anyone to take with you for a test drive, bring the vehicle to a reputable mechanic.

Step 3

Request a vehicle history report. This step is crucial to ensuring that you are not driving a lemon! A vehicle history report will provide you with details on any accident, fire and flood damage that the vehicle may have incurred in the past. It will also tell you whether or not the vehicle has a salvage title.

Step 4

Walk away from any private party or dealership that will not allow their vehicle be viewed by a mechanic or does not provide you with an accurate details of a vehicles history.

A salvage title is something that is issued by a state when a vehicle is severely damaged and the costs of repair can exceed the vehicle’s value.

The seller should disclose if a vehicle has a salvage title. Unfortunately, salvage titles are not always revealed. Sellers often alter title documents and make cheap cosmetic repairs to salvaged vehicles to make the vehicles look sound on paper and in person.

A common scheme associated with salvaged vehicles is title washing. In title washing, a dealer moves a vehicle to a state with looser title laws and then registers the vehicle in that state. Depending on that state’s laws, the state may not indicate that the vehicle ever had a salvage title. In a title washing scam, the seller may register the vehicle in multiple states until the salvage brand is removed from the title.

Car clipping is another problem that is associated with salvaged vehicles. In car clipping, two wrecked vehicles are factually sawed apart and then the ends of the separate vehicles are welded together.

To determine if a vehicle has a salvage title, ask the car seller to show you the title document. Look for wording on the title indicating a salvage title. The wording may vary from state to state. If the words totaled, junked, salvaged, reconditioned, rebuilt, or warranty returned appear on the title, then it is a salvage vehicle.

If the title does not indicate salvage, carefully examine the title document to see if it has been physically altered. If the title looks like it has been altered in any way, beware. We also recommend that you order a Vehicle History Report, take a test drive and have the car inspected by a qualified mechanic.

Each year thousands of people unwittingly buy cars that have been severely damaged in accidents. It’s not too difficult for dishonest rebuilders to patch such vehicles up quickly and turn a profit by selling them to unsuspecting buyers.

To avoid becoming a victim of such auto scams, keep reading our blog.

1. Understand what happens to “totaled” vehicles. If a car or truck is damaged so badly that the cost of repairs exceeds its value, insurance companies typically declare the vehicle to be a total loss and pay out a claim to the owner. Then many insurers sell these totaled vehicles at salvage auctions. Sometimes the cars get purchased for their parts or scrap materials; in other instances, they get snatched up by rebuilders or by car dealers who hire rebuilders.

2. Check the vehicle’s title. Does it reveal the car or truck’s storied past with the words “salvage title” or another similar expression, such as “parts only,” “unrebuildable” or “scrap”? If so, that’s a sign of a past accident. If not, don’t assume that the car is completely OK. Those words appear on the titles that insurance companies hand over at salvage auctions, but it’s not hard for those in the barely regulated rebuilding industry to have that disclosure removed. One way to do this is to bring the car to a different state and re-register it.

3. Ask the seller point blank. The simplest way to find out whether the car has been in an accident is to ask. Unfortunately, though, the seller may not be up front with you. Nevertheless, make it a habit to ask this question clearly and directly.

4. Go to a mechanic. Whenever you buy a used car, it’s important to have the vehicle carefully inspected by a mechanic — ideally a mechanic with a background in collision repair. Even if you are worried about the cost, get the inspection anyway. It’s worth it!

Title washing is used by car dealers for “washing” the vehicle’s bad history in order to conceal from the buyer that it had a salvage title because of severe accident, flood or other damage. Title washing incidents reached their outbreak after hurricane Katrina when many car dealers got stuck with excess of flood-damaged vehicles.  Title washing is also applied to “clipped” vehicles with the back and front coming from different cars, or rather of what was left of them after a crash. So, a wreck is sold at the price of a good car.

Title washing scam results from the lack of a unified law regulating vehicle documentation in all the USA states. Many people who bought used cars are already car title washing scam victims.

So how is title washing done? A car that was totaled by the insurance company is assigned a salvage title, which is often called “branding”. Then it may be repaired and driven, but its resale value lowers, along with the possibility to sell it. As a result, the car is transferred to states that do not recognize the current title and is assigned a new, clean tile. Title washing erases the branding and the car’s value rises, and now it is easier to sell. Remember that title washed vehicles can be sold not only by car dealers but by individuals as well.

To avoid title washing perform VIN number check and get vehicle history report for revealing the truth about the car’s title. Once a car is assigned a salvage title, the information is added to the computer database of services providing vehicle history reports. These records remain in the there even when the car is transferred to other states.VIN number check protects not only from title washing but also from many other used car flaws, for example salvage title, odometer rollback or a flood damaged car.

Sellers are supposed to disclose if a vehicle has a salvage title, however this is not always the case. Carfax reports that yearly thousands of salvage cars are sold to unsuspecting buyers. Altered title documents and cheap cosmetic repairs make the cars look sound.

When purchasing a vehicle, always check the title for any “remarks” on the title that will denote any discrepancies such as:

• Reconditioned
• Salvage
• Flood
• Theft recovery
• Stolen
• True miles unknown
• Out of state title
• Exceeds mechanical limitations

Remarks such as the above mentioned are causes for alarm. Besides, be aware of the limitations of a CARFAX vehicle title report.

A vehicle with a Salvage” or “Recondition” title has been rebuilt from the junk yard. These vehicles have been declared a total loss and not repairable. These vehicles should be sold to salvage yards for parts. Nonetheless, many totaled vehicles are never given a “Recondition” or Salvage” title. Curbstoners, unethical dealers and repair shops buy these totaled vehicles and cosmetically repair the damage.

Other remarks such on a title such as Flood, Theft recovery, True miles unknown, Stolen, Exceeds mechanical limitations, or Out of state titles can be types of “Reconditioned” or Salvage” vehicles. While cars with these titles may look good, many are mechanically and structurally unsound and worth only a fraction of book value.

Note: Titles containing the above discrepancies may be “washed” or “cleaned” by simply transferring the title to another state that does not include discrepancies on the title. A professional inspection will surely detect these discrepancies even if the title has been “cleaned.”

Sometimes car dealers sell poorly rebuilt, wrecked or salvaged vehicles. Thus, after the purchase car buyers find that the vehicle is unsafe and moreover it is priced too high. The majority of these vehicles were involved in accidents or floods. Most of the vehicles look good on the surface, but they may have steering problems, defective brakes, inadequately welded parts and overall, poor handling.

Most of the state laws require car dealers to inform customers before purchase if the car has, to their knowledge, a “salvage title” or has been involved in an accident. If a car dealer fails to disclose any such information it is considered fraud.

Make sure to inspect the vehicle thoroughly before buying. Especially, look for the following;

• matching of paint on the outside and inside of the door frame.
• parts of the car should line up with each other and the spaces between the hood and trunk and around the doors are straight.
• flood damage is fairly evident in certain vehicles by the presence of mud or dirt under the mat in the trunk, or moisture under the seats or inside the trunk or hood. There may also be watermarks inside the doors.
• if the car has an out of state title, it may have been moved to another state due to its extensive damage.

After the recent hurricanes in the southern part of the United States a lot of vehicles were damaged. Though insurance companies have declared these vehicles to be salvage, many flood vehicles appeared in dealership lots. These salvaged vehicles have extensive water damage, but there are steps you can take to protect yourself from buying them.

Flood vehicles are usually sold to consumers “as is” and the buyer finds out that the vehicle is salvaged only when he/she take it to get insured. This is when they realize that their agent can’t even issue them an insurance rate quote because of the salvage title on the vehicle. In cases like this most buyers have to go through a length inspection process with the state motor vehicle bureau that is required for a vehicle with a salvaged title.

One of the best ways to protect you from buying a flood vehicle is to get a vehicle history report from CARFAX or other organization which tracks flood vehicles and other types of damage. You can take the vehicle to a qualified mechanic to be inspected or inspect it yourself. Some signs of high water levels and tale water mark signs may be seen if you look inside the engine compartment. Also check under carpeting to see if there is mold or any presence of water staining. It is important that you thoroughly inspect the electrical system, as this is where the most water problems show up first.

Buying a used car isn’t easy because it may entail a series of future problems and financial headaches. That’s why a free vehicle history report is an excellent choice for anyone who is  buying a used car. Why? Because it will give you the peace of mind to go ahead with your purchase. For instance, if the car is in such bad shape it’s been given a salvage title, it would be far better to know that before you sign on the dotted line.

Unfortunately, there are many unscrupulous people ready to misrepresent the condition and value of the cars they are offering for sale. The most common of the various used car scams is the odometer rollback. The odometer is a device inside the car which indicates the distance that the vehicle has traveled. You may have seen it as a row of numbers inside the speedometer. One of the main variables in determining the price of a car is mileage.

An average car in the United States travels approximately 15,000 miles per year. So, if you want to buy a used car that was made in the year 2000, you should expect to see about 90,000 miles on the odometer. If it reads 150,000, the car has received heavy usage and may not be worth as much since maintenance costs may be high. But what if the odometer reads only 50,000 miles? In that case, you need to be suspicious. Unless it was owned by an old lady who used it for short neighborhood errands, the odometer may have been tampered with.

Don’t be fooled into thinking that a newer, digital odometer is more impervious to such alterations. All that is required is a laptop computer, the software, some cables and a basic set of instructions. Need an example? Just enter some basic keywords in any Internet search engine like “how to reset odometer” or “unhooking odometer.” You will find that there are dozens of pages with the required information.