I bought a car with a washed title! Now what? Well, you have been searching for the perfect car to enjoy during those sunny days and recently found a beautiful convertible. The price seemed fair, so you considered sealing the deal with the dealer. However, before finalizing the purchase in a few days, you decided to do some due diligence and check the VIN. It turns out you bought a car with a washed title (also called title laundering).
Now, while a washed title car’s VIN can appear clean on Carfax, you might discover photos of the same car at an IAAI auction in Iowa. At that time, the car wasn’t operational and had a salvage title. Now, this car is up for sale in Michigan with a clean title. The dealer probably mentioned they got it from a charity auction. Interestingly, the VIN photos from both the auction and the dealer’s site match, and the Carfax report timelines align seamlessly.
Well, title washing is a shady practice where people manipulate or falsify the title to conceal a vehicle’s history. The idea is to make a salvage title appear clean. Many sellers are unaware of this but understand the following:
- Tampering with a car’s odometer is illegal (a washed title can hide this information).
- Title washing in the U.S. is a federal offense.
Bought a Car with a Washed Title
Title washing is a sneaky tactic where a car’s history gets concealed by moving its title between states with different labeling practices. For instance, a car in Texas experienced flooding. If this car is taken to a state that doesn’t note flood damages on titles, the flood record might vanish.
Different states have varied criteria for labeling a car as salvage. In some places, a car must sustain damage worth its entire value to earn this label. Yet, in others, insurance companies hold the power to decide. So, if a damaged car is moved to such a state, its salvage title could magically transform into a clean one. This can mislead potential buyers about the car’s history.
This deceptive practice is known as title washing. Consider this scenario: You reside in California and decide to purchase a car from another state with a rebuilt title. However, California does not acknowledge rebuilt titles. As a result, they may grant the car a clean title by default.
To protect yourself from such pitfalls when car shopping, always verify the VIN with the National Insurance Crime Bureau (NICB). This history check will reveal if the car was ever declared a total loss. Remember, title washing can sometimes occur unintentionally.
Blake Rovana’s Experience with Title Washing
Rovana excitedly purchased her first car from a roadside dealership. She found the car’s price reasonable and its appearance satisfactory. She opted for a 2012 Toyota Corolla S, priced at $8,995. After making a down payment of $7,900, she was left with monthly installments of $385.87 for the $2,000 she financed.
The dealer repeatedly assured Blake that the car had a clean title and was free of issues. However, a peculiar situation arose when she noticed the car’s tags were dated 2021, even though she bought it in December of that year. Upon visiting the DMV, she was informed that her car was registered as junk.
When she confronted the dealer, he feigned ignorance, insisting the car had a clean title. After persistent calls over three days, Blake finally received her tags. But the surprises didn’t end there. A few days later, the dealer admitted the car didn’t have a clean title after all. He proposed a reimbursement of $1,000 and a reduced monthly payment in the $200 range.
The dealer attempted to extract more payments from Blake. Eventually, he offered her a $7,000 check to return the car. While she lost $1,300, having made a down payment of $7,900 and a monthly payment of $385.87, she felt somewhat relieved.
What Can Title Washing Hide?
Title washing might hide many things, but it’s often linked to natural disasters like floods and hurricanes. You might have heard about cars damaged by floods in places like Texas and Louisiana being sold with hidden water damage—those stories are real. Flood damage is one of the main problems that title washing hides.
Here are some problems that title washing can hide:
- Damage and repairs
- Theft history
- The number of previous owners
- The actual mileage
How Often Does Title Washing Occur?
According to data from IHS, around 1 in every 325 used cars might have gone through title washing. This means there could be more than 1 million cars with washed titles on American roads right now. Since the average age of used cars is getting older each year, the risk of buying a car with a washed title is sticking around. Certain places are more likely to have this issue than others.
The data also reveals that in most states, around 1 in every 400 to 500 cars might have a washed title. However, in some states, the problem is much worse. For example, in 2014, the states with the highest title washing rates were Kansas (about 1 in every 211 vehicles), Oregon (about 1 in every 152), South Dakota (about 1 in every 141), and Virginia (about 1 in every 107). Mississippi had the worst rate, where approximately 1 in every 44.6 cars had a washed title. This means that in Mississippi, the average person sees many cars each day with fraudulent titles.
How to Protect Yourself
Check a car’s VIN, its title status, and its history before making a purchase to avoid title washing. You can always get a Carfax report, even if the seller seems trustworthy or the car looks great on paper.
When you buy a car, nearly 10% of your costs go to licensing, registration, and taxes. If you add in the chance of the car losing value because of a fake title, it’s a clear choice to spend a bit on a vehicle history report. Ultimately, checking the VIN and accident history before buying a car gives you solid information to make your decision.