What is title washing?
The short answer: title washing is fraud. It involves editing or creating a title to eliminate information that might decrease the value of a vehicle or make it hard to sell. Labels like “salvage” or “rebuilt” may be removed, liens on the car, and even theft records may disappear on a washed title. Sometimes this is done by moving the car to a different state and applying for a new title, or perhaps just “doctoring” the original title (similar to counterfeiting). States have different requirements for labeling of cars, what the term “salvage” means, and what is legally required to be reported.
Additionally, for those who do have coverage, their insurance company often sends their storm-damaged vehicles to salvage yards or auctions. As the business magazine Fortune explains, “Because of inconsistencies in state regulations, flood-damaged cars can be sold at auction and wind up on used car lots hundreds of miles away without so much as a warning that they’d weathered a massive storm.”
As you can see, this is a widespread problem. Fortunately, there are numerous ways to protect yourself the next time you go vehicle shopping. By being aware of “title washing” and knowing how to identify flood-damaged cars, you are already wiser than other, unsuspecting buyers.