Figuring Out Good and Bad Used Car Titlesby Steve Cypher on Friday, December 28th, 2012
Financing a used car that’s been involved in a flood or a serious accident can, believe it or not, negatively affect your credit rating.
At Auto Credit Express we understand how this can happen because for more than twenty years we’ve been helping car buyers find dealers for their best chances at auto financing.
Today’s topic, however, covers the ins and outs of used car titles and why buying a used car that’s previously been damaged can hurt all buyers – but especially those with poor credit scores.
Most used cars have what is known in the car business as a “clean title.” In most cases this is true even if a vehicle has been involved in an accident – just as long as the damage wasn’t extensive enough that it was declared a total loss.
But in some cases even if a car has been stolen or has been in an accident with enough damage to declare it a total loss its title might not reflect this due to an unscrupulous and illegal practice.
The process is called “title washing” and it involves taking a branded vehicle title to another state and re-titling the vehicle with the result that that same vehicle now has a title that doesn’t reflect the vehicle’s true history.
In addition to vehicles with washed titles, used car buyers might also inadvertently sign off on a branded title without realizing it. This is what to look for on a car title:
Check the color of the title. Many states use one color for a clean title and a second color or colors for the various title brands.
Carefully check the front and back of the title you are signing to be sure the words “rebuilt”, “salvage”, “junk”, “fleet”, “mileage unknown” or “stolen” don’t appear anywhere on it.
What you can do
High risk car lenders will not finance a vehicle with a branded title. Another issue is that many state DMVs now run title applications through the national VIN database before issuing a title to the new owner (you). If the vehicle had a branded title it could be difficult to both license and insure. If the vehicle turns out to be stolen, it will probably be seized by the state.
Even if you can get it licensed and insured, a vehicle with a branded title can turn out to be far less reliable and will be worth much less than a comparable clean vehicle at trade in time.
To prevent this from happening, once you’ve narrowed down your used car choices you should:
• Request vehicle history reports.
• If the reports are clean, then run the VINs through the national database at https://www.nicb.org/theft_and_fraud_awareness/vincheck.
• Finally, when you’ve chosen the vehicle you want, pay for an inspection either from a company that specializes in this or from both a certified master mechanic and a body and frame specialist.
As we see it
Your best chance at avoiding financing a vehicle with hidden damage includes vehicle history reports, running the VIN numbers through the national database and, finally, having the one you want thoroughly inspected before you sign any paperwork.
One more tip: Here at Auto Credit Express we specialize in placing applicants with bad credit with new car dealers that can offer them their best opportunities for car loan approvals.
So if you’re ready to begin reestablishing your car credit, you can begin now by filling out our online auto loans application.