The Expert Podcast

So, how can a clean title go to a salvage if you have no accident? Here's a great example of how a title record may not be 100% accurate. This is a person who purchased a Tesla with a clean title and then, after they purchased it, they found out that it's a salvage and it's going to cost $12,000 to fix it. Here's how this happened.

The way that a salvage title can be created isn't just one method. It can be created either by the insurance company, who pays a claim on a vehicle that says, "We paid out this much money to have this vehicle fixed, so now it's a salvage." Another way to do it is if the owner of the vehicle fixes the car themselves and says, "I fixed this damage and I want to make it a salvage to protect their liability if they sell it." Another way is if the damage is detected by the factory, the manufacturer, and then they put it on the record. That's what happened with this Tesla.

What happened was this Tesla was damaged in an accident. The owner of the vehicle at the time fixed it themselves. They didn't want to go through their insurance. They didn't want to put it on the title. They fixed it and then they sold it to a third party.

Once that third party purchased the vehicle, they brought it to the Tesla dealership to have some repairs done. The manufacturer was able to determine that the car had been previously damaged both from the diagnostics on the vehicle. The computer said there was an impact, there was deceleration, and then also they did an inspection and they found that the frame had been dented, the battery had been damaged. So, the Tesla dealership put a salvage on it. This is completely legal. The salvage designation does not have to come from an insurance company. It can come from any method.

This is why it's very important when you're purchasing a vehicle, not only to check the title record. In this case, the buyer checked Carfax. Now, keep in mind, even if the car had been filed through an insurance company, Carfax doesn't catch everything. Carfax is not 100% accurate. It'll even say in their disclaimer that the records aren't 100%. So, you may have Carfax records that are not complete, but the only way they do get it at all is if it goes through an insurance company. They're not going to pick it up if the owner did it or if the manufacturer did it.

So, be very diligent, especially on these electric vehicles, to check out the frame, check out the underneath, check out the battery, do a battery test, but also to make sure that the physical examination doesn't indicate there was damage, even if this title doesn't show salvage on it.

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