Salvage Vehicle Scam
A salvage vehicle is one that has been involved in a major accident and has been deemed, to not be worth repairing by an insurance company. Once an insurance company declares a vehicle salvage, it pays the maximum market value of the vehicle to the insured and then disposes of the vehicle by auctioning it off to the highest bidder.
While most state and federal laws require a used car dealer or private seller of a vehicle with a salvage title to disclose the fact to the buyer, some unscrupulous sellers do not. Hence, here is some common car scams associated with salvage titles that you should be aware of.
Title Washing Scam
A salvage vehicle is rebuilt so that they seem to be normal used cars. While purchasing a salvage vehicle can certainly save you a lot of money. This type of scam is commonly called lemon laundering and is practiced by unscrupulous car dealers.
The scam involves registering the vehicle in several states, one after another. This usually takes place in states that have rather lax or loose rules and regulations about the documentation of car titles. If a dealer registers the vehicle enough times. The title will eventually end up not having a salvage or junk title annotation on it. The dealer is then able to sell the vehicles as a normal used car and usually collects a premium on the vehicle.
The lost title salvage vehicle scam
The lost title scam is perhaps the biggest type of salvage title fraud. The scam usually works like this: the seller of the vehicle tells you that he must sell the vehicle quickly. And is willing to sell it at a deep discount. Then tells you the reason for the sale and at such a low price is because he/she has lost the title. The seller may tell you that he/she doesn’t have the funds to apply for a new title.
They may offer you some sort of written authorization so that you can apply for the title yourself. What they don’t tell you is that the salvage vehicle has a salvage or junk title, and you still paid way too much for a salvage vehicle. Do a vehicle title search online to avoid the scam.
What are the Average Fees to Get a Title?
You will need a new car title if yours was lost or damaged. The process and cost differ to get a new car title in different states. A brand new car title is more difficult to get if you have recently purchased a car without a title. It will be more time-consuming. You will need to complete a Certificate of Title and Registration of a Motor Vehicle.
This can be obtained at a relevant government office or downloaded off the Internet. The title owner should sign the application, then take the completed forms to a motor vehicle branch office for replacement titles.
Can I Buy a Car with a Salvage Title Title?
You can buy whatever you want. But when you buy a car with no title, you take a big risk of being a fraud victim. Take into account whether it is a new or second-hand car and research the car’s details on the Internet to look for anything suspicious. You may get a discount on a car but then inherit a stolen car or traffic fines. Unless you intend to use the car for its parts, it is not recommended to buy a car with no title.
Is Selling a Car with a Salvage Title Illegal?
To sell a car with no title always looks suspicious. However, if the vehicle is more than ten years old it can be sold for parts legally. This means the car should be dismantled and not driven. The only reason you would buy such a car is if you are building or restoring cars yourself. If you are trying to sell a car with no title, it will be useful to check whether there is a lien on the car. So it is necessary to contact the car’s lender who should release the lien before ownership can be legally transferred.