The U.S. government recently announced some new regulations that are designed to stop the practice of “title washing,” a process that fraudulent car dealers use to “wash” away a vehicle’s history of salvage by titling cars in states with imperfect systems for finding salvage history. Title washing can hide a car’s flood damage or salvage history, and lead to a consumer paying much more than they should for a flawed vehicle.
While these regulations are definitely needed, the fact is criminals will always find a way to bypass regulations. Rather than relying upon the government to protect your next auto investment, here’s what you can do to reduce the chances that you end up with a car with a “washed” title:
1. Don’t buy a car from a private individual if their name isn’t on the title of the car they are selling. When it’s time to sell a car with a washed title, a lot of con artists will say that they’re “selling this car for my friend or relative, that’s why my name isn’t on the title.” If this story is true, they should be able to supply their friend or relative when it’s time to complete the transaction (as recommended in our 7 tips for buying a car from a private party post). If not, you should be suspicious.
2. Inspect the car carefully. While most salvage and flood damage vehicles are easy to spot – you can use your nose to smell must and mold from flood damage, and you can look for signs of body repair to spot a major salvage repair – some salvaged vehicles are impossible to spot without a full mechanical inspection. This is just one more good reason to pay your local mechanic to inspect any used car you’re going to buy.
3. Get a vehicle history report. Carfax and Autocheck both offer vehicle history report services, and for a relatively small amount of money you can get a guarantee that the car you’re looking at doesn’t have a washed title.
4. Use your head – if it’s too good to be true, walk away. One of my biggest pet peeves is with consumers that don’t understand one simple fact: If it seems too good to be true, it IS too good to be true. If you find a used car selling for half as much as all the similar used cars you find, ask yourself “What’s wrong with this car?” Nine times out of ten the people who get taken advantage of didn’t bother to stop and consider why the car they bought was “such a good deal.”
If you follow these four tips your chances of buying a salvaged or flood-damaged car drop to about zero.