Car Title Fraud: More Common than You Think

In today’s day and age, people are becoming more and more hesitant to trust one another, especially when it comes to buying and selling cars. Car title fraud, the act of deliberately misrepresenting the title history of a vehicle, occurs more often than it should and puts a heavy stain on used car buying. The reason for car title fraud being so prominent throughout the country? The states’ lack of outlining what constitutes a “salvaged car.”

Whenever a vehicle is severely damaged in an accident or by a natural disaster, or stripped of its parts, an insurance company can take possession of the car after reimbursing the insured driver and repair it. The vehicle is then given a new title that includes the type of damage the vehicle sustained and the vehicle is then often sold at an insurance auction.

If you purchase your vehicle at an insurance auction and the following happens, you have become a victim of car title fraud:

  • The car is purchased at a “too good to be true” price because of the car’s damaged history.
  • Known as “title washing,” the purchaser re-registers the car in a state that does not recognize the branded title as salvaged.
  • The purchaser of the damaged car which now has a clean title then sells the damaged car for a profit to an unsuspecting person and makes a profit.
  • The unfortunate result is a car that is more prone to problems and being a danger on the road because of its damaged past and the new driver could be out of a lot of money when the car breaks down shortly after purchase.

You Can Prevent Car Title Fraud from Occurring

So what is the best way to avoid car title fraud?

  1. The federal government is currently in the process of stepping in and mandating what is considered a salvaged car so there isn’t a discrepancy between states.
  2. Until then, if your car was manufactured after 1981, you can perform a car title history check by inspecting the vehicle identification number.
  3. Familiarize yourself with car title fraud by doing some research on various Web sites pertaining to the subject.

It is unfortunate that fraud, particularly car title fraud, still exists to this day. Not only is it financially damaging to the victim, but by driving an incompetent car, you are putting other drivers on the road at risk. If you plan on buying a used car anytime soon, be sure to watch your back and do all of the extensive research you are capable of doing to avoid falling victim to car title fraud.

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Staff contribution: Rafael Onak

Source by Tom Lustina

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