Curbstoning questions and a cautionary tale

[Dangermouse]

A question for those with a bit of knowledge in the used car trade.

I am looking for a car for one of my children and it seems that most of the ones on Craigslist "for sale by owner" are actually by full time used car dealers, part time used car dealers or people just flipping the cars (aka curbstoners - pretending that they are the owner)

I was interested in a particular 2007 Nissan Sentra with only 45k miles. It was priced fairly for the age and miles, certainly not in the "too good to be true" range of many scams. The pictures in the ad were taken in a driveway in front of a nice house with open garage door and the wording implied that the seller was the owner; "well maintained", "very reliable" "clean title" etc etc. When I spoke to the seller he said that it was in great condition, no accidents, no body damage etc, but no, he didn't have a Carfax report. So before I traveled 30 miles to see it, I got the VIN off him, to run a Carfax myself, and an address. The address was a church parking lot which started to sound alarm bells, but I know some people are wary about giving out their home address to Craigslist buyers (me included) and I made a mental note to see the title and verify the address if I chose to buy the car, but could let it pass for now.

So I ran the carfax and surprise, surprise it had been written off as a TOTAL LOSS by the insurance company three months prior in VA. Carfax's emphasis, not mine, in bold red capitals. Of course the seller knew nothing about nothing. The accident was on 4/6/16 to the second owner, airbags deployed. The third owner was listed as the Insurance company in 5/3/16 after the TOTAL LOSS declaration on 4/28. Title was issued by Virginia

Now, obviously, it doesn't take too much damage to write off a $5k car, and it may well have been properly repaired. But my questions for anyone in the know are

1. Assuming the seller wasn't lying, how can he have a "clean" title? I take it the second owner (who had the accident and therefore the insurance claim) signed their title over to the Ins Co as part of the claim and the Ins Co then had the title issue into their name and sold it at auction. Would it really be a "clean" VA title at this point?

2. Someone bought it at auction and repaired it. If they bought it at a VA auction with the insurance companies "clean" title, could they repair it and get a clean GA title? (Actually as I type this, I think the answer would be that they would process the paperwork with the VA title, and GA DMV would see that it is a total loss and issue me with a Rebuilt title). Comments?

And then of course I would have no recourse to the seller as I had only met him at the church parking lot.

Obviously I wasn't going to buy a car that had been written off, to put my kid in, so I passed, but it has got me wondering about how the whole system works. Generally, in GA, licensed used car dealers process the paperwork for you, - they claim they have to by law but I think it is to their benefit possibly to hide all manner of sins, whereas if you buy privately you go to the DMV with the title signed by the PO.

[Jim D]

I live in Virginia and have always understood that once a car was "totaled" it could not have a clear title in Va. Now that said, I have heard of cars that were totaled and retitled in another state then retitled in Va with a good title. I have a salvage title Delorean that I bought in Pa and even if I rebuild it completely, I am told in Va, I can never get a good title, it will always be a salvage title.

[David T]

I live in Virginia and have always understood that once a car was "totaled" it could not have a clear title in Va. Now that said, I have heard of cars that were totaled and retitled in another state then retitled in Va with a good title. I have a salvage title Delorean that I bought in Pa and even if I rebuild it completely, I am told in Va, I can never get a good title, it will always be a salvage title.

A lot depends on the laws in each State. In some a "clean" Title can be issued it it is fully and properly repaired and reinspected. In some States you can never do that and in some States even if you can get a clean Title issued it will still have some indication it was repaired and reissued. It can be that the car was properly repaired but even if it is perfect you should never pay what you would for a similar car that was never totaled. A "rebuilt" car has a diminished value. If you feel bothered by the fact that the car was rebuilt you should pass on it, that is what Carfax is for. As for people posing as owners when in reality they are dealers, happens all the time but you should judge the deal by the condition of the car, the price and the Title. That is what you will walk away with and figure never to see the seller (dealer) again.

[DMCVegas]

First off, I will tell you right now that if you're ever going to buy or sell a car in your life, you need to listen to this guy's podcast right here:

https://itunes.apple.com/us/podcast/...937280934?mt=2

Curbstoning is pretty easy, albeit illegal in some states. Clean titles themselves can actually be pretty easy to procure. Not as easy as it once was mind you, but easy enough. Let's talk about title washing.

Not all states use the same systems for designating a salvage vehicle. Just like how a driver's license can have an endorsement area, vehicle titles would do the same to designate between normal, salvage, and non-repairable. But different states would use different codes to determine such things. So going from one state to another, the next state might not recognize what in the world this means. So an "S" designation in one state might mean "Salvage". But the next state over might use an entirely different letter, or even a number to designate a car as salvage. So if they don't recognize the flag on the title, it doesn't get passed along, and thus it gets a fresh, regular title with a normal history.

This can get even more confusing to a DMV worker when there are also several other sub-brandings that can be applied to a vehicle. Aside from rebuilt, my state of Nevada also includes reconstructed, flood, lemon law, specialty constructed, etc. The list goes on, and just confuses other states unless like Nevada they come with descriptive brands that fully spell out what is wrong with the vehicle. Thus it makes it even easier to wash titles since we do not have universal compliance here.

Now most states have initiated programs to avoid this. California for example has regular titles in blue, but salvage appear in red with the word SALVAGE printed at the top.

But then there are rebuilt vehicles. These are vehicles that were previously written off as salvage, and then repaired and re-certified for on-highway use. This *might* be a vehicle that was in an accident, or it may just be a vehicle that was deemed uneconomical to repair, so the insurance company just had the normal vehicle junked. Perfectly fine and driveable vehicle, which could still even be safe with only significant cosmetic damage. But since it's current estimated value was so low, the repairs were deemed to expensive and it was written off. Florida for example will actually reassign a brand-new VIN to the vehicle with new build plates which supersede the factory ones to show this is a rebuilt vehicle. The old VIN is invalidated, and a new title with the VIN is now issued.

With Nevada & California, normal titles are blue, and salvage titles are orange and red respectively with the word "SALVAGE" printed in bold letters across the top.

Using Nevada for example, if I have a vehicle with an orange salvage title, I can petition to rebuild the car, and once approved, I can begin work. Once I'm done rebuilding (restoring it back to it's prior condition using the same parts) or reconstructing the car (simply building a roadworthy vehicle out of multiple parts from multiple manufacturers), the title will then be reissued as a normal blue one, but does still get branded as rebuilt in the upper right side. The question there of course is does the other state recognize a rebuilt car, or do they just recognize only normal and salvage without the use of branding or they just miss it entirely since the title looks normal? If the latter, then they're just going to issue a clean title. There is nothing wrong with that in and of itself.

You can also see other changes to titles as well that happen either accidentally, or otherwise. When I first got my Nevada title, it listed my car model as "DMC-12". Later on after I lost the title and needed another one, they changed it to "DT26". Now I can't get that changed because according to every DMV person since, they're not allowed to alter titles. Although I even seen examples of Pontiac Fieros converted to Kit cars that then get reissued titles that retain the GM VIN, but get the make and model converted from Pontiac to Ferrari within the same state. It can happen.

I have other fun DMV stories as well. But I'll tell you now to always inspect the vehicle in person and do your research. If in doubt and the person asks to meet you somewhere, skip the churches and ask to meet at the police station. Most police departments are more than happy to allow Craigslist transactions in their lobbies and parking lots to keep people safe. Also, never ever EVER buy a title from someone who refuses to sign it and/or doesn't have their name on it. Likewise when selling, always sign and date the title and never turn it over without doing so.

[Dangermouse]

Re your last point, if I roll up to Billy Bobs used cars and he has 20 cars on the lot, none of the titles will actually say "Billy Bobs Used Cars" right.

The title will be in the name of the last actual real owner who presumably signs it when he traded the car in; or turns sit over to the insurance company, or title-cash company.

Isn't this why Billiy Bobs Used Cars process the paperwork with the state?

[DMCVegas]

Re your last point, if I roll up to Billy Bobs used cars and he has 20 cars on the lot, none of the titles will actually say "Billy Bobs Used Cars" right.

The title will be in the name of the last actual real owner who presumably signs it when he traded the car in; or turns sit over to the insurance company, or title-cash company.

Isn't this why Billiy Bobs Used Cars process the paperwork with the state?

That is a fantastic question!

Because after all it isn't unheard of for a dealer to take a vehicle in on trade, and then send it elsewhere to be sold instead of selling it on their own lot. This could be another affiliate used car lot, or even sending it direct to auction where it winds up being sold to another dealer. And can even be resold again. I had this very scenario with my truck (believed to be a repo from the PO) where it was taken in and sold at auction in Southern California to a dealership, and THEN resold again at auction in Southern Nevada where it was finally resold to the dealership I purchased it from. Then of course it was sold to me. Which means it changed hands a total of 3 times before the new title was issued.

For vehicles to rapidly change hands like that, it doesn't make sense for the buyers to continually submit paperwork to issue a brand-new title each and every single time. Especially when they also cross state lines so often. It's also expensive too.

Car titles always have the owner's name(s) listed, which is you and your cosigner if applicable. There will be an area for a leinholder's name printed on there as well. If you took out a loan to purchase said vehicle, that will be filled in by the state and sent to the lienholder's office. Once your loan is paid off, the leinholder or an authorized agent signs away the rights to the vehicle to release the lien and then sends it off to you along with the original contract you first signed those years ago with a paid in full stamp and signature as well.

So what happens when you sell your car? Well at the bottom there are two areas that have to be filled out. One by you which includes your signature and the odometer reading (if applicable), and then the rest by the buyer which has their legal name, address, & signature. And of course you must date it all on the day of the transaction.

But what happens if you trade it in to a dealership? The same exact thing happens. However, on the back of your title there are 3 more areas for Dealer Only transactions. This takes into account the trading and brokerage of vehicles as they move between auctions and dealerships before finally being sold back to consumers. It should look something like this:



So lets go back through that sale where you're going to be buying a car from Billy Bob's Used cars. Will the title have Billy Bob's name printed on it as the original owner? No it will not. However it WILL have Billy Bob's Used Cars printed on there either as the first buyer (trade-in), or one of the 3 subsequent dealer reassignments when Billy Bob bought the thing at auction, documenting the entire chain of custody for the vehicle as it changed hands.

Now all of that is for a legitimate dealership. Curbstoners are not legitimate. Depending on states, there are limits as to how many vehicles a private individual can sell within a year before they must acquire a dealer's license. So what they'll start doing is using friends and family members as proxy buyers to get around these rules. So *technically* you're not actually buying the car from them, but rather the last seller. That's a problem.

So let us say that I'm a curbstoner trying to sell you a car, but in this scenario I'm a bad one who is out to cheat you. I tell you that the vehicle has only had one owner, it's never been in an accident, and it's got a freshly rebuilt transmission inside. You ask why my name isn't on the title, and I tell you how I'm selling it for a friend who can't do it themselves for whatever reason. So you go ahead and buy the vehicle from me.

Then it all falls apart.

Turns out you're the 6th owner, the thing has been in a collision, AND the transmission fails because it's original and been abused all it's life. Do you have a case to take to court? Sure, but who are you gonna sue? Not me! My name is no where on that title. You ask where I can find my "friend" at, I tell you I've no idea who this person is. There is no legal chain of custody which proves my legal ownership of this vehicle, so I'm immune from legal action. Sometimes the "friend" may even be the PO that has no idea what in the hell is going on! Curbstoners can flip cheap cars that regular people like you and I are selling, and then bring us into the legal mess. Which is why you NEVER sign your title until the buyer signs and dates it first. Then once the transaction is completed, fill out the necessary forms to alert your state DMV or whomever to the sale of the vehicle. Especially in states California & Texas where license plates are assigned to vehicles and not owners. They rack up parking tickets and toll road fines, guess who has to pay? Unless you notified the state of the sale immediately, it's going to be you.

You can sometimes get a good deal from a curbstoner, but you need to have the vehicle checked out first, and you MUST enter into the negotiations and inspections with the highest of skepticism. You also must be ready to run away at any time.

p.s. Not all states have the dealerships take care of the paperwork. Some DO have to perform electronic submission of sales notifications and other paperwork to have the fresh title sent to you. And when it comes to license plates, you sometimes have to still get those yourself. And when you do get your title back from the lienholder, spend the money to get a fresh one printed up with just your name(s) on it to avoid any future confusion. And if you ever do loose the title, get married and change last names, or whatever, apply for a replacement immediately.

[David T]

When a used car dealer gets a car he will not Title it. It costs money and takes time. He will have the seller sign it, that's all. Anyone else, a private person for instance, is REQUIRED BY LAW IN MOST STATES, to quickly Title the car, there are usually penalties if it is not Titled by a certain date. When inspecting a used car to buy, part of a proper inspection is examining the Title making sure it is "clean", it is in the name of the owner, seller, and all of the numbers match up. If there is ANY problem or hesitation on the part of the seller to allow you to examine the Title, that all by itself is a "Red Flag" and can cause you to pass on the deal. Without a good Title all you are buying is a pile of parts that LOOKS like a car. You may never be able to Title, register, and plate the car and if you do and the Title has a problem it can cost a lot of money to get it fixed and it may never really be a "clean" Title. The car will have a "diminished value" when you go to sell it too. Bottom line, if the Title has a problem or Carfax says it does, keep walking.

[dodint]

First off, I will tell you right now that if you're ever going to buy or sell a car in your life, you need to listen to this guy's podcast right here:

https://itunes.apple.com/us/podcast/...937280934?mt=2

I came into the thread to recommend Steve's podcast/site, but there it is, nice work.

http://lehtoslaw.com/ is his website (with podcasts) for the non-Apple people.