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Beware of Salvage Title Fraud When Buying a Car

Salvage titles are a common problem in the car industry, and they come with many risks, including the risk of title fraud. This article will discuss what a salvage title is, how it works, and why you should be careful while dealing with them.

So, what exactly is a salvage title? A salvage title is a document issued by an insurance company when they have paid out a high claim on the vehicle. It doesn’t necessarily mean the car is damaged or totaled, but the claim must be of an exceptionally high value. The problem with a salvage title is that once a vehicle is labeled as salvage, it’s restricted from going back on the road. However, dealers and private sellers often try to sell a vehicle with a salvage title without disclosing it. Which in itself is a troubling position to find yourself in. 

The downsides of a salvage title

One of the biggest problems with a salvage title is that you can’t insure the vehicle for a comprehensive policy. You can only get basic liability, which can be risky. Before a salvage title vehicle goes back on the road, it has to go through an inspection, and 90% of salvage title vehicles never get approved for inspection. They don’t pass inspection, even if they look fine from the outside. There might be hidden problems such as airbag sensors, antilock brakes, frame damage, corrosion, or other issues that fail inspection.

Moreover, the value of a salvage title vehicle is estimated to be about 50% or 60% of the actual value. So, if you pay full price, you’re getting ripped off, and unless you can buy a salvage vehicle for half price, already fixed, and you know it passes inspection, you’re not actually getting any deal.

To make things worse, some dealerships are selling cars with salvage titles, misleading unsuspecting buyers. It’s easy to pass off flood-damaged or recovered theft vehicles as a car that’s not ready to be driven but with a salvage title. Even if the car looks fine, it’s not worth the risk.

It’s important to note that a salvage title is more than just the car’s condition. It’s the title history, and that history will be with the car forever. Running a National Motor Vehicle Title Information System search (NMVTIS) will show salvage for that VIN for the rest of its life. You can’t wash it off; it will always be with your vehicle. Even when you go to sell it, it’ll still show salvage for your buyer.

Avoiding the risks of a salvage title

So, how can you avoid falling prey to the risks associated with salvage titles? Firstly, don’t rely on services like Carfax or Bumper, which may not be a hundred percent accurate. Instead, check the National Motor Vehicle Title Information System (NMVTIS), a government records database with all these records. Secondly, check every car thoroughly, ensure the condition is good, and also check the title to avoid ending up with a vehicle that looks good on paper but has a branded or distressed title that you can’t sell or finance without disclosure.

In conclusion, a salvage title is not something to take lightly. It’s essential to understand the risks associated with them and do your due diligence before purchasing any vehicle with a salvage title. Don’t let a good deal blind you from the potential risks, and make sure that you always check the title history before making a purchase.

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