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Title Washing Scams
Vehicle documentation laws across the country lack uniformity resulting in a practice known as title washing which allows cars to lose their salvaged or flood-damaged branding.
Imagine that you own car dealership stuck with a lot full of flood-damaged vehicles. This is exactly what happened to
many new and used car dealers following hurricane Katrina. When you include the cars and trucks owned by individuals
throughout the Gulf states estimates of losses approach 500,000 vehicles. Would you knowingly purchase one of these
vehicles? Few would and that's led to an increase in a practice called "title washing".
What is Title Washing?
Title washing hides the history of a vehicle that's been salvaged. Salvage titles are assigned to cars that are deemed
a total loss by insurance companies. This is also referred to as "branding" a vehicle. This doesn't mean the car can't
be driven but vehicles branded with salvage titles have lower market values and are difficult to sell. Title washing washes
away a vehicles branding. Once the branding is eliminated, the car's value goes up and it's a lot easier to sell. You
can see why so many car owners might be motivated to "wash" their titles.
How Title Washing Works
Title washing allows dealers and individuals to remove salvage branding from car titles to minimize their losses. Titles are
washed by transfering a salvaged vehicle to a state that doesn't recognize the brand. When the state issues a new title, it
may no longer show that it had been salavaged. If not, the seller will move it from state to state until the branding is gone.
When it is, the vehicle's history will have been "washed" clean.
Get a Vehicle History Report
Tilte washing is a dirty trick but consumers can do an AutoCheck VIN Check which tracks a vehicle's history even if it's moved to
another state. Once a vehicle has been branded and that information is reported to AutoCheck, it remains in their records no
matter how many states it's sold in. The title may no longer indicate severe damage, but a vehicle history report will. "Washing"
a title doesn't wash away computer records. Keep in mind that title washed vehicles are sold by individual sellers as well as
car dealers. Don't assume that because you are purchasing a car on a lot that it's title hasn't been washed clean. If you can,
obtain a title guarantee from the dealer in writing. This shouldn't be difficult if the seller is a reputable dealer.
How to Report Title Washing Fraud
If you suspect a local car dealer is committing fraud by knowingly selling a flood car
or a salvaged vehicle as a good condition used car, contact your auto insurance company, local law enforcement agency or the
National Insurance Crime Bureau at 800-TEL-NICB.
More Title Washing Information
Used vehicle buyers beware
Prize PT Cruiser makes round trip
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