Title Washing
Title Washing: Understanding the Practice and Its Implications
Title washing is an illegal practice used to remove a vehicle’s salvage or branded title status by transferring its registration to a different state with more lenient title branding laws. This deceptive process effectively “cleans” the title, making it appear as though the vehicle has a clean title with no history of significant damage or loss. Title washing can pose serious risks to consumers, as it hides the true history of a vehicle, potentially leading to unsafe driving conditions and financial losses.
How Title Washing Works
Title washing typically exploits the differences in state regulations regarding vehicle titles. Each state has its own laws and criteria for branding vehicle titles, including designations like “salvage,” “rebuilt,” “flood,” or “junk.” Some states have stricter requirements for title branding, while others may be more lenient or may not require certain disclosures at all. Here are the steps involved:
1) Purchase a Salvage Vehicle: An individual or dealer buys a vehicle with a branded title, often at a significantly reduced price due to its damaged or compromised condition.
2) Transfer the Vehicle to Another State: The vehicle is then registered in a different state where title branding laws are less stringent or where the specific type of damage is not recognized. This state may issue a new title without the previous branding, effectively “washing” the title clean.
3) Resell the Vehicle: With the newly issued clean title, the vehicle is sold to an unsuspecting buyer who may believe they are purchasing a car with no history of significant damage or loss.
A Flooded Vehicle Is the Easiest to Resell Without a Salvage Title
Here’s how it works
1) The owner files a claim, and the insurance company pays the policyholder the value of the vehicle.
2) The insurance company sells the flooded vehicle at auction.
3) An unscrupulous buyer purchases the vehicle and chooses a state with lax title restoration laws, like one that doesn’t require flood-damaged vehicles to be labeled as “flooded” or even salvaged. Or, if it’s an older vehicle, they title it in a state that doesn’t require salvage branding on vehicles more than 7 or 8 years old. In many cases, they don’t even move the vehicle out of state, they just use title washing “associates” to do the leg work.
4) While the title issues are worked out, the buyer rips out the carpet and seats. Then, they steam clean and sanitize the carpet and padding or replace it if it’s worn. They shampoo and sanitize the seats, door trim panels, and headliner.
Next, they steam clean the engine compartment, undercarriage, and trunk. They drain and replace all the fluids. Then they perform a full detail on the paint and sell the vehicle to you.
5) They check surrounding areas to find a market that’ll bring the highest price. They change the title again and sell it there. The vehicle and the title were washed. You think it looks great. But because all the electronics were underwater, you’ll have nothing but electrical problems from that point on
How to spot a title washed vehicle
It has a new carpet, or the carpet and upholstery are spotless— Who puts a new carpet in a used car? A title washer, that’s who.
It has new paint— The only people who would paint a used car are rebuilders who have repaired major damage or title washers.
It’s been titled in multiple states or the current title is new— That’s the final step in washing a title.
Always start with the VIN and CarFax or AutoCheck to find out where the vehicle was titled. Then follow the owner transfers. For example. if the car was titled in Florida and was title transferred within 6 months or so following a major Florida hurricane to a state with lax title laws, chances are almost 100% that you’re buying a flooded vehicle.
In 2005 Hurricanes Karina and Rita flooded over 600,000 cars in the Gulf states. A high number of those vehicles were re-titled through other states with looser title laws.
If the vehicle is titled as salvage or flooded in one state and is sold with a “clean title” in another state, chances are high that you’re looking at a title washed vehicle.
For more information on Title Washing, see this post on CarFAx
©, 2021 Rick Muscoplat