by Armando Martinez
When selling a car, it's important that the title transfers correctly and that the new owner is registered as the vehicle's legal owner. Unfortunately, some people will try to scam you by selling you a car with a fraudulent title.
So, what does a fake car title look like? A fraudulent title can have many different problems that make it invalid. These issues make it difficult for a buyer to register the car in their name or may even make the vehicle unregistrable. In some cases, a fraudulent title can even lead to legal problems for the buyer down the road or signify unsafe vehicles.
The risk of car title fraud is one of the dangers of buying or selling a vehicle privately. However, if you choose to buy your car from a private party, you can still do some things to help protect yourself. In this article, we'll explain what car title fraud is, what signs to look for, and how to avoid it in a private party sale.
Common Types of Car Title Fraud
A fake car title certificate has been tampered with in some way so that it appears to be legitimate. For example, the title might be missing information, have incorrect information, or be completely blank.
While car title fraud can come in many forms, two types are most common: title washing and title jumping. In either case, you should report the fraudulent title to the authorities. Car title fraud is a severe crime, and the penalties can be significant.
Always be vigilant when inspecting a car's title. If anything looks fishy, don't hesitate to ask questions or get a second opinion.
Title Washing
Title washing occurs when a car with a salvage title is cleaned up and sold without disclosing the damage. This can be done by repairing the car, getting a new vehicle identification number, or changing the registration to another state that doesn't have strict regulations. Title washing is illegal in most states, but that doesn't stop some people from trying to do it.
If you suspect title washing, the best thing is to inspect the car yourself and compare the title to the history report. Vehicle inspections can usually be done at a local dealership or by a mechanic. If the vehicle has been in an accident, there will likely be some evidence of it, even if the title has been washed.
There are a few other things you can look for to see if the car has been tampered with, including odometer readings, VINs, and vehicle history reports. You should avoid purchasing the car if these things don't match up.
Title Jumping
Title jumping or title floating is when a motor vehicle title is transferred to someone else without completing the proper paperwork in the interim. This can happen if the vehicle is stolen, has been in an accident and is being sold for salvage, or has outstanding debt from a previous owner.
Sellers can avoid paying taxes and fees on the sale by skipping out on the paperwork, which can be tempting if they sell a car they shouldn't have. However, this is illegal and can cause many problems for the buyer down the road. As a buyer, you may have issues registering or insuring a vehicle that has been title jumped.
To avoid being a victim of title jumping, you'll want to look closely at the information on the title. Understanding the ownership history of a car can be tricky, so we recommend getting a complete vehicle history report to supplement your title check. If anything looks suspicious, you should avoid purchasing the vehicle. You may also want to contact the DMV in the state where the car is registered to alert them of the situation.
Preventative Measures To Take
Despite the various types of fraud that exist, there are some things that you can do to protect yourself. Common sense and due diligence are your best allies in this situation. Keeping these preventative measures in mind can help avoid becoming a victim of car title fraud.
Compare the Vehicle Title to the History Report
When buying a car, a vehicle history report is vital. This report will tell you if the car has ever been in an accident, if it has a salvage title, or if it has ever been reported as stolen. You can then compare this information to the title to ensure they match up.
If the history report shows that the car has a salvage title, but the title doesn't mention it, that's a red flag that something might be wrong.
A complete vehicle history report will include the following:
- The car's make, model, and year
- The car's VIN
- Whether the vehicle has a salvage title
- Whether the vehicle has ever been in an accident
- If the car has ever been reported as stolen
All this information is useful for buyers because it can help them make an informed decision about the car they're interested in and whether or not it has a clean title.
If Possible, Meet Up at the DMV
If you're buying a car from a private seller, it's best to meet up at the DMV when transferring the title. This way, you can ensure that the title is legitimate and that the seller is correctly transferring ownership of the car. The DMV can also answer any questions that you might have about the process.
Meeting at the DMV is also an excellent way to apply for the car's registration and license plate without worrying about the seller forgetting to send them to you. Plus, you can avoid potential scams by meeting in a public place.
Common Signs of a Fraudulent Title
There are a few common signs that can indicate a fraudulent title. If you see any of these signs, it's best to walk away from the deal or have a professional inspect the car before buying it. Understanding how to spot a fake car title can help you avoid becoming a victim of fraud.
Missing or Distorted Watermark
A watermark is a security feature that is included on all legitimate titles. Most states use a watermark to help prevent fraud, so if you don't see one, that's a red flag. This mark is usually a state seal or the word "void." Watermarks can only be seen when the title is held to the light. If the watermark is missing or distorted, that's a sign that the title has been altered.
Abnormal Print Quality
Another security feature of titles is that they are printed on special paper that is difficult to copy. If the title you're looking at has abnormal print quality, it could be a sign that it's fake. Be sure to look for any smudging, bleeding, or discoloration of the ink.
Abnormal print quality can also include print that is too light or too dark. If the title looks like it has been photocopied, that's a major red flag. Always ask to see the original title before buying a car to verify proof of ownership.
A Recent Issue Date
If the title has a recent issue date, that could be another sign that it's not authentic. Legitimate titles are usually only issued when a car is first purchased or when it changes ownership. If the title you're looking at was issued within the last few months, that's a red flag.
You should be especially cautious if the title was issued within the last few weeks, as that could be a sign that it was created recently to sell a stolen car or a car with a salvage title.
Registration in a Different State
Out-of-state registration isn't necessarily a sign of fraud, but it's something to be aware of. If the car you're looking at is registered in a different state, be sure to do your research and ask questions about why that is.
Reconstructed titles and flood-damaged vehicles are often registered in other states to hide their histories. Sellers also use this tactic to avoid paying taxes and fees in their own state. While there are legitimate reasons for a car to be registered in another state, it's something that you should know.
This article was written by Armando Martinez. Armando Martinez is among the nation’s experts on automotive titling, registration, DMV services and document operations. With nearly two decades of experience across a broad range of financial services functions and some of the largest names in auto, from Wells Fargo to Uber, Armando combines vision and ingenuity with a wealth of information so auto shoppers and sellers can learn from his experience.
Start your transaction with Caramel, learn more about how the process works, or reach out to our Support team with any questions.
