How to Look Out for Title Washing
This scam is illegal and can leave you with a defective vehicle if you're not careful.
One of the scams that private sellers may attempt is called "title washing," and they can engage in it in a few different ways. If you're planning to buy a used vehicle from a private seller, it's important to know what to look out for and how to avoid falling victim to scammers.
What Is Title Washing?
Title washing is an illegal act that involves removing negative information from a car title to inflate its value.
Scammers use this tactic to fraudulently remove information like liens or a branding (such as a lemon brand), odometer rollback brand, salvage or rebuilt title brand, or water damage brand. Washing a title can not only make a vehicle appear more valuable than it actually is, but it can also conceal significant issues that could impact your decision to buy the car.
Scammers can wash a title in a few ways:
- Moving the vehicle to a different state: regulations for title branding can vary from state to state, so if a title is branded, the seller might move the car to a state where that particular brand isn't recognized to get rid of it
- Applying for a new title: when applying for a new title, vehicle owners and insurance companies are required by law to disclose the car's history. If the car owner doesn't provide the information and the insurer doesn't have it, unethical sellers can bypass regulations
- Altering the original title: in some cases, sellers may simply make changes to the original title to remove evidence of branding
If you buy a car with a washed title, you could end up as the owner of a severely damaged car without knowing it. If it's bad enough, the car could break down shortly after you buy it, leaving you with an undrivable car and without the money you paid for it.
How To Ensure a Title's Validity Before Purchasing
When you're buying a car in a private-party transaction, it's easy to get duped by someone who washed the vehicle's title. There are some steps you can take to avoid falling victim to this fraud:
- Purchase the vehicle history report: using CARFAX or AutoCheck, you can get a copy of the vehicle's history including accidents, title brands, and more. While these reports don't always provide a comprehensive history, they can give you enough information to make an informed decision
- Request a pre-purchase inspection: it costs between $100 and $200 to hire a mechanic to perform a pre-purchase inspection, and experts recommend you do this every time you buy a used car. An inspection can reveal any major issues that could impact the vehicle's value
- Contact your insurance company: in some cases, insurance companies may have a record on a vehicle that can provide you with additional information. While you don't necessarily need to do this with every used car purchase, it could be worth considering if there's other evidence that makes you second-guess the validity of the car's title
If you feel like the car's seller is concealing anything about its value or condition, don't be afraid to walk away from the deal.
What You Can Do if You Suspect a Seller of Title Washing
Washing a title is a federal crime, so if you have good reason to believe a seller has engaged in it, contact your state's attorney general office or Department of Consumer Affairs.
If you already purchased the car, consult with an attorney to find out how to establish a case and obtain damages from the seller.
The Bottom Line
Title washing can create significant problems for car buyers, so take steps to protect yourself throughout the car-buying process. Continue to inform yourself about title washing and other scams to prepare for private-party transactions and what you can do in these tricky situations.