Title washing is a deceptive practice that leaves buyers with a damaged car and a lighter wallet. This blog post reveals the dangers of title washing, explains how it works, and provides valuable tips to avoid falling victim to this scam.
What is Title Washing?
Title washing is a fraudulent practice that conceals a vehicle’s history, posing significant risks to buyers and lenders. It is considered a federal crime, but the enforcement of title washing laws varies among states, making it difficult to combat.
Imagine buying a used car with a clean title, only to discover later that it has a hidden history of severe damage or even theft. That’s the unfortunate reality for many car buyers who fall prey to title washing scams.
The National Association of Attorneys General has determined that title washing is the most severe issue faced by used car buyers. Criminals deceive buyers by transferring the vehicle’s title between states with different regulations or by obtaining a duplicate title, effectively “washing” the damaging information from the vehicle’s history. This results in car buyers paying more for a vehicle than it’s actually worth, or even worse, unknowingly purchasing a car with serious safety risks.
Definition and Process
Title washing involves unlawfully or deceitfully eliminating or concealing information from a car title, such as transferring the vehicle to a jurisdiction where the brand is not recognized and where it is then registered with a legitimate title. Scammers do this to hide damages, thefts, or other issues related to a vehicle’s history.
Dealing with title washing is challenging because it is not always easy to spot. Many types of vehicles are eligible for title washing, including cars, trucks, motorcycles, and boats. With such a wide range of vehicles at risk, it’s crucial for buyers to be vigilant and informed. Understanding how title washing works will help consumers protect themselves from purchasing a compromised vehicle.
Legal Implications
Although title washing is a federal crime, it isn’t consistently enforced across states, allowing scams and the sale of unsafe vehicles to continue. It is estimated that one in every 325 cars on U.S. roads has fraudulent titles concealing their flaws.
States like Kansas, Oregon, South Dakota, Virginia, and Mississippi have the most reported cases of title washing. This inconsistency in enforcement creates a complex landscape for car buyers, who must navigate varying state laws and regulations to protect themselves from title washing scams.
How Can I Identify Washed Titles?
Identifying washed titles is quite challenging, but there are signs to look for, such as inconsistencies in vehicle history, suspicious pricing, and out-of-state clues. Being aware of these red flags will help you avoid falling prey to title washing scams and ensure that you’re purchasing a vehicle with an accurate history.
Inconsistencies in Vehicle History
Inconsistencies in vehicle history include:
- Gaps in annual auto registrations
- Negative title brands not appearing in the report
- Mileage discrepancies
- Errors or mistakes on reports
- Multiple owners or quick sales
- Absence of key indicators for fraud prevention.
Researching and verifying the car’s history prior to purchase will help uncover any discrepancies that point to title washing.
Suspicious Pricing
Suspicious pricing refers to pricing that raises doubts or suspicions regarding its authenticity, such as a price substantially higher or lower than the market value, unusually large cash payments, or a price that appears too good to be true. If you encounter a vehicle being sold at a price significantly lower than its blue book value, question the offer closely and remain vigilant for suspiciously inexpensive vehicles.
Always check the vehicle’s value and question deals that seem too good to be true to avoid falling victim to title washing scams.
Out-of-State Clues
Out-of-state clues is a typical indicator that a vehicle has undergone title washing. Signs such as stickers from out of state sports teams or businesses, as well as physical remnants of different environments left behind on a vehicle, often suggest that the car’s title has been washed.
If you spot any of these clues, dig deeper into the vehicle’s history to ensure you’re not falling prey to title washing.
The Impact of Natural Disasters on Title Washing
Natural disasters, such as floods and storms, typically lead to a surge in title washing as damaged vehicles are repaired and sold with washed titles. Scammers take advantage of the situation to profit from unsuspecting buyers, who are unaware of the vehicle’s true history and the potential safety risks associated with it.
Flood-Damaged Cars
Flood-damaged cars are a prime target for title washing, as scammers attempt to hide the damage and sell the vehicles with clean titles. Buying a flood-damaged car leads to expensive repairs and potential safety risks, as the vehicle has generally sustained significant damage that is not immediately apparent.
Storm-Related Surge in Washed Titles
Major storms causing extensive vehicle damage also lead to an increase in title washing, as scammers take advantage of the situation to repair and sell damaged vehicles without disclosing their true history.
Buyers should be aware of the risks associated with purchasing vehicles that have been through natural disasters and take steps to protect themselves from title washing scams.
How Do I Protect Myself from Title Washing Scams?
The key to protecting yourself from title washing scams is to be vigilant and informed. Obtaining a vehicle history report, verifying the vehicle’s VIN and accident reports, and purchasing from reputable sellers are crucial steps to ensuring a safe and secure transaction.
Obtaining a Vehicle History Report
A vehicle history report, also known as a car history report, is an invaluable resource when purchasing a used car, as it provides information regarding the car’s history, including prior owners, accident history, title information, and more. Obtaining a vehicle history report, such as those provided by Carfax or Autocheck, will help you identify potential title washing and protect yourself from scams.
To obtain a vehicle history report, you’ll need the vehicle’s vehicle identification number (VIN). By reviewing this report, you will spot any inconsistencies in the vehicle’s history, such as discrepancies in reported mileage, title information, and accident history, which are indicators of title washing.
Verifying VIN and Accident Reports
Verifying the vehicle’s VIN and reviewing accident reports are important steps in detecting title washing. The VIN is a unique 17-character alphanumeric code that provides information about the car’s manufacturer, model, and features. Comparing the VIN against the vehicle’s title and registration documents will ensure their accuracy.
To verify accident reports, review the vehicle’s history report for information on any accidents the vehicle has been involved in and any repairs that have been made. You'll be able to detect any discrepancies that often indicate title washing and avoid purchasing a vehicle with a hidden history.
Purchasing from Reputable Sellers
Purchasing from reputable sellers will significantly reduce the risk of title washing scams, as they are more likely to provide accurate vehicle history information. To identify reputable sellers, review customer reviews, feedback scores, and other indicators of customer satisfaction.
Additionally, search for sellers who are transparent about their policies and provide explicit information about the vehicle’s history. Purchasing from a credible seller helps ensure a safe transaction.
The Role of Insurance Companies in Title Washing
Insurance companies play a role in title washing. When a vehicle is deemed a total loss by an insurance company, it is assigned a salvage title, indicating that it has been involved in significant damage or accidents. The salvage title car is then washed and sold to unsuspecting buyers.
Salvage Titles and Insurance Claims
Salvage titles are issued when a vehicle is deemed by an insurance company to have sustained significant damage and has little financial value in its current state. Scammers take these salvage title vehicles, hide the damage, and attempt to sell the vehicles with clean titles.
Impact on Car Buyers
In title washing cases, car buyers are unaware of a vehicle’s salvage title and insurance claim history, which leads to costly repairs and other problems in the future. Additionally, title washing typically leads to legal difficulties for the buyer if the vehicle is established to have been deceitfully altered.
State Regulations and Title Branding
State regulations and title branding vary, making it difficult to combat title washing. These differences create opportunities for title washing scams to occur.
To protect themselves from title washing scams, car buyers should familiarize themselves with the specific laws and regulations of each state regarding used car title branding.
Varying State Laws
Different states have varying laws and regulations regarding a vehicle’s title. For example, certain states require mechanics or new owners to adhere to specific standards and have the vehicle inspected before the state grants a new title, such as a rebuilt one.
States such as California, Georgia, Illinois, Mississippi, New Jersey, North Carolina, Tennessee, Texas, and Virginia either allow title washing or do not take any action to prevent it. This lack of oversight leads to inexperienced car buyers making unwittingly risky purchases. This inconsistency in enforcement creates a complex landscape for car buyers who must navigate varying state laws and regulations to protect themselves from title washing scams.
Efforts to Combat Title Washing
Efforts to combat title washing include compliance with the National Motor Vehicle Title Information System (NMVTIS) and increased enforcement of existing laws. The NMVTIS is a database that mandates every state to submit data on vehicles, helping to track and prevent title washing scams.
Summary
Title washing is a deceptive practice that poses significant risks to car buyers, lenders, and insurance companies. Understanding the dangers of title washing, the varying state laws and regulations, and the role of insurance companies will help buyers protect themselves from scams and ensure a safe purchase. Remember to obtain a vehicle history report, verify the VIN and accident reports, and purchase from reputable sellers to avoid falling victim to title washing scams.
Frequently Asked Questions
What is title washing?
Title washing is a deceptive practice of obscuring a vehicle’s history by transferring or altering its title, thereby hiding any potential issues with the car. This practice is used to hide a car’s past accidents, odometer rollbacks, or other issues that affect its value or safety.
How are titles washed?
Title washing is a practice of obtaining a clean title for a car with a salvage title by transferring it to a different state with less stringent laws. It is a complex process that requires a thorough understanding of the laws in the state where the car is registered. Careful research and understanding state regulations will help detect title issues.
Does title washing show up on Carfax?
Yes, Carfax catches instances of title washing through its variety of sources and provides information to avoid such schemes on Vehicle History Reports.
Can you wash a title in Texas?
Title washing is allowed in Texas and is underregulated in states such as California, Washington, Tennessee, Mississippi, Illinois, New Jersey, North Carolina, Massachusetts, Virginia, and Georgia.
Why do people ask for a clean title?
People ask for a clean title to ensure that no other person has rights to the property except for those listed on the title and that there are no liens or issues with the ownership.
A clean title also suggests that the vehicle has never been deemed a total loss and has a slightly higher resale value.
