By Alexo - October 30th, 2012 08:59 AM
Cars are given a salvage title when an insurance company deems it not worth repairing following an accident. The vehicle is auctioned off to the highest bidder, usually a rebuilder who attempts to restore the car to its former glory.
Often, salvage title cars are a great investment, but they can unfortunately attract unscrupulous dealers. When shopping for a vehicle, be on the lookout for salvage car scams. Instead of getting a great investment, you might just get scammed.
The Lost Title Scam
This is one of the most common types of salvage title scams, but car dealers are usually not the culprit. The lost title scam is most often carried out by individual sellers who claim they have lost the vehicle’s title. As a result, they offer the car for a ridiculously low price and push to sell it quickly.
If you ask about getting a new title, they may tell you that the application is too expensive or that he or she simply doesn't have the time to go through the process. In addition to these excuses, they may offer you a type of written authorization so you can go and get the title yourself.
What the seller doesn't tell you is that the vehicle actually has a title, but it is a salvage or junk one. If you fall for this scam, you end up paying way too much for the vehicle.
To avoid the lost title scam, do a vehicle title search online before signing on the dotted line.
The Title Washing Scam
This sneaky scam involves registering a vehicle in multiple states, usually in those with lax regulations and rules about car title documentation. If a dealer is persistent and keeps registering the vehicle enough times, it is likely that the title will eventually lose its junk or salvage annotation. The dealer then collects a premium by selling what appears to be a normal used car.
The best way to avoid the title washing scam is to do your homework online before making a purchase. Do a title search and pay a few bucks for a vehicle history report. The information you gain will be priceless when you are trying to determine if a car is a good investment.
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