Imagine being sold a used car that was involved in a severe accident but has been sold to you with only the minimum amount of repairs required to make the car look presentable. It would not only cost you more than it should but it would also be highly dangerous for you to be unaware of the hidden damage incurred by the car.
A salvage title is issued by a state motor vehicle agency to indicate that a car may not be safe to drive owing to damage incurred in an accident, flood or fire.
In many states in the USA, a salvage title is issued when the cost of repairing a damaged vehicle is more than 75% of its original value.
Insurance companies may also determine if a vehicle has been 'totaled' and declare it to be a salvage vehicle. The criteria used by an insurance company to declare a car to be wrecked may vary from that used by a state motor vehicle agency.
In some cases, a salvage title can also indicate that a car was stolen.
Salvage title fraud
The buyer of a used car deserves to know if the car that they are buying has been issued a salvage title. This can help them to not only bargain for a fair price for the car but can also save them from running the risk of driving a damaged car on the road.
Unfortunately, some sellers may trick unwary buyers into buying a salvage vehicle without informing them of the same. In fact, there are several scams related to this kind of fraud such as title washing and car clipping.
Title washing is the act of taking a salvage car to a state with lenient title laws compared to the original state and registering the damaged or stolen car in that state. Depending on the state's title laws, the vehicle title document may not indicate that it's a salvage vehicle.
Car clipping is the act of sawing two salvage cars apart and welding them to form a 'new' car that is then issued a vehicle title without mentioning the word 'salvage'.
Detecting salvage title fraud
Although salvage vehicles can be restored and driven in a way that's safe and legal, the buyer of a used car deserves to know if the car has a salvage title and if it has been repaired or not. If the car's been rebuilt, in which case it would have a 'rebuilt salvage title', it is essential to determine if the repairs were conducted by an experienced mechanic.
How to avoid salvage title fraud
When buying used cars, ask the seller to show you the vehicle title. The title document of a salvage vehicle would have the word salvaged, junked, reconditioned, totaled, rebuilt, or warranty returned on the document. Sometimes, a salvage title is printed on a different-colored paper than a regular vehicle title.
Examine the title document carefully to look for signs of tampering, if any. A title document with misspellings or one that looks like it has been altered could be a sign of trickery.
Choosing a reputed website for buying a used car can also help you defend yourself against car scams and frauds.