Buying a used car with hidden damage or other issues can throw a wrench into the process of rebuilding car credit
Subprime auto loan issues
Buying a used car that’s been stolen or involved in a major accident can seriously affect the outcome of a bad credit car loan.
We know this because for the last two decades we’ve been helping our applicants locate dealers that offer approved auto loans to people with less than perfect credit. Our Auto Credit Express website also explains buy here pay here loans and disability income.
Today’s topic, however, covers understanding used car titles and how buying a vehicle with hidden damage can hurt your chances of credit repair.
Most used cars have what is called a “clean title”. This is the case even if they’ve been involved in an accident – just as long as the damage wasn’t extensive enough to declare it a total loss.
But if a car has been in an accident with enough damage to declare it a total loss or if it’s been stolen, things can get sticky to downright ugly.
“Title washing” is the practice of taking a vehicle that’s been stolen or with a branded title and re-titling it in another state resulting in a clean title.
While this new “clean” title may appear to be fine, these used cars are potential ticking time bombs.
In addition to buying a used car with a washed title, you might also inadvertently sign off on a branded title without realizing it. Here is what to look for:
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.
Check the front and back of the title you are signing carefully to be sure the words “rebuilt”, “salvage”, “junk”, “fleet”, “mileage unknown” or “stolen” don’t appear anywhere on it.
The consequences and what you can do
Subprime auto 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.
Even if you can get it licensed and insured, a vehicle with a branded title can be much less reliable and is worth much less than a comparable clean vehicle at trade in time.
To prevent this from happening, if you’re seriously considering a particular used car you should:
• Request a vehicle history report.
• If the report is clean, then run the VIN through the national database at https://www.nicb.org/theft_and_fraud_awareness/vincheck.
• Finally, pay for an inspection from an inspection company or a certified master mechanic as well as a body and frame specialist.
The Bottom Line
Your best chance at avoiding the chance of buying a vehicle with hidden damage includes running a vehicle history report, running the VIN number through the national database and then having it thoroughly inspected by a certified master mechanic prior to signing any paperwork.
You should also know that Auto Credit Express specializes in helping people with auto credit problems find a dealer for their best chance at getting approved auto loans.
So if you’re serious about getting your car credit back on track, you can begin now by filling out our online auto loans application.
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