Used car buyers could be in for an unwelcome surprise i... Used car buyers could be in for an unwelcome surprise if they unknowingly purchase a salvaged vehicle. (The Consumerist, Flickr)

There's no greater shock than buying a used vehicle and later discovering that it's a rebuilt wreck. Talk about buyer's remorse! If you've paid retail price for a used vehicle, discovering a salvage title history can be devastatingly costly when you try and resell it. Other consequences can be even more harmful, as rebuilt cars are liable to have serious safety defects.

Clearly, this sort of fraud is one of the biggest pitfalls in used car shopping. But by educating yourself and applying a few basic principles of smart car shopping, you should be able to protect yourself. As a consumer, knowledge is power. So it's important to understand what a salvage title is, how the title washing process works, and how one of these vehicles can eventually be offered for sale.

The Salvage Title

Laws vary from state to state, but salvage titles are generally issued to a vehicle that is extensively damaged, usually from 70% to 90% of its retail value. This damage can be caused by almost anything -- a devastating accident, a flood, vandalism, or fire. Insurance companies will then designate the vehicle "totaled," take possession of it, and the state then issues a salvage title.

At this point, the car is usually sent to an auction so the insurance company can retrieve some of the money from the loss. Some buyers at these auctions are interested in using these totaled vehicles strictly for parts. Used auto parts is big business, and these companies will typically disassemble the car and sell undamaged parts, recycling what's left of the "car-cass." Others buyers are reputable vehicle rebuilders who will fix a totaled car so that it can meets state inspection and safety laws and then resell the once-wrecked vehicle with a full disclosure. In this case, a buyer usually enters into the deal knowing exactly what was done to repair the vehicle. You might ask why a person would buy a vehicle with a salvage history? One word: Money. Salvage-titled vehicles are worth significantly less, so carry lower prices.

<a data-cke-saved-href="http://autos.aol.com/used/" href="http://autos.aol.com/used/" _blank"=""> <img data-cke-saved-src="https://s.aolcdn.com/os/autos/photos/manufacturers/ford/20100426_used-ford-escape_225mz" src="https://s.aolcdn.com/os/autos/photos/manufacturers/ford/20100426_used-ford-escape_225mz"> </a> <p><a data-cke-saved-href="http://autos.aol.com/used/" href="http://autos.aol.com/used/" target="_blank">Search AOL Autos Used Car Listings</a> </p></div></div> <p>Unfortunately, unscrupulous rebuilders also get their hands on these vehicles. Their con is to buy the damaged cars and rebuild them to operating condition as cheaply as possible. They then put them through a process called "title washing," used to remove any indication of the salvage history from the title. </p> <p style="font-weight: bold;">Title Washing</p> <p>The title of your car is the way you record your ownership with the state. But states have different procedures and requirements for issuing titles, so an unscrupulous seller can sometimes re-register a vehicle in a different state in ways that cause the salvage history to disappear. So "title washing" activity occurs more frequently in areas where a few states border one another in a relatively small area, simply because of the geographic convenience. Once the title is "clean," a seller can sell the vehicle to an unsuspecting buyer at a much larger profit. </p> <p>But more often after a title has been cleaned, vehicles are fed into a national auction circuit and transported across the country to be sold far from where they originated. This means there is little chance for local authorities to catch up to the thieves. Worse yet, is that the unsuspecting buyer at these auctions is likely to be a dealer, perhaps even an honest one. Once the formerly salvage-titled vehicle has changed hands in this way, it can be even harder to identify.</p> <p style="font-weight: bold;">Protect Yourself</p> <p>The first rule of buying any used car is to always have a pre-purchase inspection performed before <a class="injectedLinkmain" data-cke-saved-href="http://autos.aol.com/used/" href="http://autos.aol.com/used/">buying a used car</a>. A trained eye can pick out the telltale signs of major repair: paint overspray, frame damage, water damage, and sloppy repair work. Spending a hundred dollars for an inspection up front can save you a ton of money down the road.</p> <p>One of the most serious conditions to try and spot is water damage. Cars that have been flooded -- like many during Hurricane Katrina -- can develop corrosion in places cars have no business rusting. This can lead to structural problems that pose a real safety threat if you're involved in an accident. </p> <p>But water damage should be fairly easy to spot. Look for water stains in the engine compartment, trunk, and doorjambs. Check electrical connections for excessive corrosion, which usually takes the form of a green, crusty substance in the electrical plugs and junction blocks (those little plastic boxes that have wires sticking out). Look at the seat mounting bolts on the floorboards -- are they rusty? If so, it might indicate the vehicle was underwater. Check the carpet for proper fit. If it's loose or wrinkled, it's possible that the carpet was removed to repair water damage. Check the oil, power steering fluid, transmission fluid, and differential fluid for a milky color or emulsification, as this can be caused by water mixing with these fluids. Reach up under the dash and seats to check for mud, dirt or silt. The only way it can get into these areas is if the vehicle was submerged in dirty floodwater.</p> <p>Check the doorjambs and body panels for paint overspray. Often when a vehicle is hastily put back together, the painter does not mask areas close to the replacement parts. In such cases the paint overspray is often evident. Check for frame and structural damage that has been sloppily repaired. Mismatching body panels and parts, mismatching paint, and misaligned glass could also be indications of a rebuilt wreck. </p> <p>Odometer tampering is another common ruse. Look at the odometer housing closely for smudging or misalignment. This could indicate that the odometer has been removed, reset, and reinstalled in the dash. Unfortunately, this practice is still widespread; just because odometers are no longer analog doesn't mean they don't get altered. So it's important to make sure that the condition of wear items match the numbers on the odometer. For instance, a car with only 10,000 miles showing should not have bald <a class="injectedLinkmain" data-cke-saved-href="https://www.autoblog.com/info/tires/" href="https://www.autoblog.com/info/tires/">tires</a> or worn-down rubber on the accelerator pedal.</p> <p>Sometimes you can spot conflicts with the sort of equipment installed -- or not installed, as the case may be -- on a used car. Make sure you do the research on the model you're shopping and if that it's supposed to have a specific type of engine or certain standard equipment and that's not the case, find out why, as disparities are indicators that the vehicle could have been rebuilt. For instance, the previous generation of <a data-cke-saved-href="https://www.autoblog.com/buy/Chrysler-Town_Country-2010/overview/" href="https://www.autoblog.com/buy/Chrysler-Town_Country-2010/overview/">Chrysler Town & Country minivans</a> came with both 3.3-L and 3.8-L V6 engines. But if you're looking at a top-of-the-line Limited model, it had best have the bigger engine in it!</p> <p>This brings up the point that you should always check the VIN (Vehicle Identification Number) closely to make sure the numbers on the title and the ID tag at the base of the windshield match. (There should also be a secondary label on the driver's door.) Any differences could be an indication that the vehicle was stolen and given a new VIN, or was devastated in a wreck and rebuilt. This can be common with unscrupulous rebuilders, who "part" cars together like Dr. Frankenstein. It's also worth doing a bit of research to understand what the numbers in the VIN mean. Different car companies have different codes for their VINS, but you should always be able to tell what year and assembly plant a vehicle came from, and more often than not, what engine should be installed in the vehicle. </p> <p style="font-weight: bold;">The Good News</p> <p>While conducting this sort of due diligence can seem overwhelming, there are services that can help you with the process. Perhaps the best known is a company called Carfax. It compiles VIN numbers from insurance companies, <a class="injectedLinkmain" data-cke-saved-href="https://www.autoblog.com/2009/10/22/dmv/" href="https://www.autoblog.com/2009/10/22/dmv/">DMVs</a>, other government agencies, repair facilities, rental companies, dealers, <a class="injectedLinkmain" data-cke-saved-href="http://autos.aol.com/extended-warranty/" href="http://autos.aol.com/extended-warranty/">warranty</a> companies, and vehicle auctions in both the U.S. and Canada. Carfax uses these records to provide information on the title history of cars for a fee. </p> <p>While Carfax does not have the complete history of every vehicle, it does have a database of over six billion records. Some car dealerships are offering Carfax reports on the vehicles they sell. Make sure you're looking at a recent report, or obtain the report yourself from the <a data-cke-saved-href="http://www.carfax.com/cfm/general_check.cfm?partner=RON_0%20" href="http://www.carfax.com/cfm/general_check.cfm?partner=RON_0%20" target="_blank">Carfax Web site</a>. A single report costs $34.99, or you can run five VINs for $44.95. It's as good a place as any to start the process of investigating the title and protecting yourself from salvage title fraud.</p> <div class="enhancement alignment-left fragmentId-22960 payloadId-80522 contentType-HTML"><br><a data-cke-saved-name="fb_share" name="fb_share" type="button_count" data-cke-saved-href="ShareShareSharehttp://www.facebook.com/sharer.php" href="ShareShareSharehttp://www.facebook.com/sharer.php">Share</a><!--{cke_protected}%3Cscript%20src%3D%22http%3A%2F%2Fstatic.ak.fbcdn.net%2Fconnect.php%2Fjs%2FFB.Share%22%20type%3D%22text%2Fjavascript%22%3E%3C%2Fscript%3E--><br><br></div> <p></p>

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