Car ownership ought to be an interesting experience. However, some unscrupulous sellers can attempt to deceive buyers through title washing which conceals important information that directly affects the car’s value and original ownership. Thus, this publication focuses on what is title washing to help protect your right as a buyer.
Title washing is the act of altering the information on a car’s title to conceal its actual condition or history. It is referred to as “washing” because it hides a car’s history from potential buyers and sometimes leads to buying a lemon.
What is title washing?
Title washing is an act that conceals the true title identity of a used vehicle. When a car title is washed, it stops a buyer from getting accurate information regarding the condition of the vehicle.
When you shop for a used car, it is vital to obtain information about the vehicle history. It could be that the used car you are buying was involved in a severe crash that makes the car undrivable and it was towed to a junkyard.
Also, the car could have been involved in flood damage that causes electrical and corrosion problems; thus, making it difficult to repair the car.
If a car was involved in a severe crash or a disaster like a flood, the car is given a rebranded title after it passes an inspection test. There are various title brandings such as salvage and water damage. For instance, if a vehicle is involved in a flood, it will be issued a water-damage title. But if an insurance company declares a vehicle a total loss, it is given a salvaged title.
There are laws meant for consumer protection against buying cars with a high degree of damage. Nevertheless, an insincere seller can still manipulate the title of a car and conceal its information before selling it to an unsuspecting buyer, which is known as car title washing.
Though the act of title washing typically rebrands the title of a car after severe damage, it could also be used to conceal the true lienholder of a car.
You run the risk of overvaluing cars whose titles have been washed and incurring losses if the buyers default on their auto loans or become delinquent. In some instances, the police seize previously stolen cars, or owners discover they have purchased irreparable lemons.
Both scenarios place new car owners in the position of having to repay a loan for a car they no longer own or can no longer use.
You may even be subject to civil lawsuits from buyers who hold you or the dealership responsible for the inaccurate titles.
How title washing works
Having known “what is title washing”, let’s discover how it works. The first common step to washing a car title is to move the car from one state to another. Various states each have varying laws regulating the branding of car titles. Insincere sellers then take advantage of the differences in title branding among states to wash car titles, thereby concealing the true title information of a car.
To remove the title of a car, a car is moved to a different state that does not recognize its title brand. Some of the states to source title-washed cars are California, Georgia, Illinois, New Jersey, North Carolina, Tennessee, Texas, Virginia, and Washington.
Another way to wash a car title is by applying for a replacement title without revealing the history of the car. To get a new title for a car, the owner or the insurance company must present the damage report on the car. If a report is not presented to indicate the damage report of the car, the title information will not reflect in the new certificate. Thus, the title of the car is not branded and it retains a clean title.
Also, an insincere seller may wash a car title by altering the title physically. Since the title certificate is in the form of paper, a seller can modify the information on the document; thus, clearing traces indicating that the car title is rebranded.
Read also: Sometimes, the seller may create a fake car title for a vehicle.
Numerous title-washed cars are formerly salvaged cars, meaning their repair costs equal between 50 and 100 percent of their market value. Salvage titles are a type of branded title typically issued to cars that have been involved in accidents. Car titles don’t always have digital counterparts, despite the Justice Department’s creation of the National Motor Vehicle Title Information System, or NMVTIS, to keep track of them. One way to wash a car title is to manually alter the document.
Some states even assign salvage titles to a car’s Vehicle Identification Number (VIN) but not its title in their DMV records. As a result, owners can repair and repaint their cars before selling them to unsuspecting buyers, sometimes without having to change states.
However, not only damaged cars are the target of title washing practices. The VINs of stolen cars from across the country may be altered to match those of salvaged vehicles. The thieves then apply for a new salvage title and ultimately sell the stolen car to an unsuspecting buyer.
How to tell a title washed car
Numerous additional red flags suggest a car has been title-washed. For instance, online marketplaces such as Craigslist may indicate that a car was sold as damaged although the car’s history report indicates otherwise. Likewise, the car may have a rebuilt title although its repairs merited a salvage title.
Some warning signs that could indicate title washing:
- absence of previous purchase records or records indicating services such as oil changes and repairs;
- “salvage title” in a car history report;
- the VIN plate has been altered, painted, or removed from the dashboard;
- altered odometer which indicates that the vehicle has a low mileage;
- flaking or mismatched paint;
- unusually leaking or rusty undercarriage; and
- too good to be true price.
Is title washing illegal?
It is illegal to wash a car title. Title washing is a federal crime investigated typically by a team of local law enforcement, federal law enforcement, and vehicle administrators.
In 2018, for instance, the Harvest couple was arrested in connection to a title-washing scam. They were each charged with first-degree theft by deception, possession of the forged title, and practice of deceptive business. On release from the Limestone County Jail, both were fined an $8,500 bond.
What states allow title washing?
Some states allow title washing or do nothing to prevent it, including California, Georgia, Illinois, Mississippi, New Jersey, North Carolina, Tennessee, Texas, Washington, and Virginia.
How to avoid title washing scam
Amidst the recurring reports on title wash scams, what can you do to avoid buying a title-washed vehicle? Below are tips to avoid buying a title-washed car:
Obtain vehicle history
A common tip to identify a title-washed car is to obtain a tracked and complete history of the car.
Sometimes, the title of a car does not record every title information of a car. In this regard, tracking the Vehicle Identification Number (VIN) discloses all you need to know about the car.
Some of the websites to look up the vehicle history are:
Buy from a reputable dealer
Buying a used car from a reputable dealer enhances the chance of not buying a title-washed vehicle.
You may further request a written title guarantee from the dealer. The dealer may not be willing to grant your request unless you urge it. Additionally, check whether the name of the seller matches the name of the title.
Report title washing fraud
You can report a title washing fraud to the local law enforcement agency, the National Insurance Crime Bureau, or your auto insurance company. Before you file a report, be certain that the seller is guilty of title washing fraud.
That’s it on the question “what is title washing?” Typically, an insincere seller indulges in a title washing scam to erase the true title of a car from its history to be able to sell the car faster. In some cases, a car title is washed as part of the procedures to make a stolen car legal.
If you suspect that a used car has been title-washed, do not buy the car. You could be buying a severely damaged vehicle that poses a life risk. Before you pay for a used car, endeavor to trace its history for the best possible information. Though the car may have been VIN-switched to conceal its history, you may be able to find helpful information regarding the title branding of the vehicle.