Date: Sat, 8 Mar 2003 15:51:33 -0800
Reply-To: mark drillock <drillock@EARTHLINK.NET>
Sender: Vanagon Mailing List <vanagon@gerry.vanagon.com>
From: mark drillock <drillock@EARTHLINK.NET>
Subject: Re: Converting 'Salvage' to 'Clean' title? How honest is it?
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The intended purpose of a 'salvage title' is to reduce fraud. When an
insured car suffers severe enough damage the insurer declares it a total
loss and pays off the owner. The car is then disposed of through one
means or another, most commonly through a salvage auction. In the days
before the 'salvage title' came into use, repair shops would buy these
total loss vehicles for cheap. They would then fix them and try to
resell them to unsuspecting buyers for full undamaged value. The
'salvage title' laws came into being to reduce this possibility. Laws
vary from state to state but in the state of Calif all licensed car
dealers must disclose to potential buyers if a vehicle offered for sale
is a 'salvage title' vehicle.
Finance and insurance companies also gain protection by the use of
'salvage titles' and no doubt played a major role in their introduction.
Insurance fraud was possible under the old system as someone could buy a
cheap totaled vehicle, fix it up a little, insure it for the full
undamaged amount, and then arrange for it to catch on fire or be stolen.
This would result in them making more than by reselling it as unless the
insurance company inspected it thoroughly beforehand they would not know
it was junk and worth much less than the insured amount. Likewise,
finance companies may need to repo a car if the buyer does not keep up
payments. They then need to resell it to get their money back, usually
through an auction to used car dealers. The dealers will not want to buy
a fixed up junker and are able to tell the difference. The finance
company benefits from knowing beforehand that a car was salvaged as they
can refuse to write a loan for an inflated value.
There are holes in the system and no room for varying degrees or types
of damage. Inexpensive or older cars can be 'totaled' for minor reasons
while very expensive or newer models get fixed under the insurance and
keep a clean title even though they have suffered major damage. Not a
perfect system. The criminal mind tries to find ways to make money with
little effort and the 'salvage title' is an effort to fight this.
Mark
Andrew Grebneff wrote:
>
> >Are we all being as honest about a vehicles past as we would expect another
> >seller to be?
>
> The whole idea of "salvage" title strikes me as being pointless. What
> does it prove?
>
> Here in NZ there's no such thing; a vehicle can be deregistered for
> any number of reasons, even just being taken off the road to save
> rego costs (most people aren't aware that they can put rego on holf
> for free). I have bought vehicles from wreckers and put them back on
> the road. The only indication of this in the vehicle's history is the
> rego plate number not matching the vehicle's date of manufacture. But
> so what? If it's free title, what use would a salvage title be?
> --
> Andrew Grebneff
> 165 Evans St, Dunedin 9001, New Zealand
> <andrew.grebneff@stonebow.otago.ac.nz>
> Seashell, Macintosh, VW/Toyota van nut
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