Selling a totaled or stolen vehicle with fraudulent documents – known as vehicle title fraud – to make the title appear clean is more common than you might think. This comprehensive guide explains how sellers commit vehicle title fraud along with six proven ways to avoid purchasing a car with a fraudulent title.

What is a Vehicle Title"

The vehicle title is the state-issued document giving you proof of ownership over your car. If your name is not on the title, you do not own the car from a legal standpoint. It can either be a physical piece of paper or an electronic document. Besides telling who owns the car, it includes a variety of important notes about the vehicle itself. The information on the title varies from state to state. However, the title generally includes:
Paint color.Title issue date.Make, model, and production year.Name of the owner or owners and their address.Odometer reading and the date when it was recorded.VIN or Vehicle Identification Number, which is unique to the car.

The title includes information about the physical state of the car as well. Based on the vehicle’s condition, the DMV classifies it into one of the following types:

Clear: The vehicle does not have a lien against it, and there is no financial liability concerning it.Clean: There has never been a large accident involving the car, and insurance agencies have not labeled it as ?totaled.?Rebuilt: The car once had a salvage title, but an owner has rebuilt...