The Expert Podcast

So, we get questions all the time about junk titles or parts only titles. In some states, they're called certificate of destruction or non-reparable. And people have acquired these vehicles maybe from Copart or IAA or some other auction. Or maybe you bought it from a private seller such as Facebook or Craigslist or uh maybe Offer Up. And what happens is you attempt to get a title for the vehicle and you discover that at some point in the history of that vehicle, the VIN number has been reported as a parts VIN number or one of the other terms that previously was mentioned. What does that mean? Well, you probably got turned away from the DMV. They told you you can't get a title. What does this mean? How can you get a title? Today we're going to talk about all the details of these types of title recordings or title brands. What they mean, what you can do about it, how it happened, and what is the uh legalities of these parts vehicles.

So what is a parts-only vehicle? As mentioned, a parts-only vehicle is one which has a designation on the title record that says the vehicle is only for parts. Sometimes it's called a junk title. Sometimes it's called a dismantle title. In Florida, for example, they call it certificate of destruction. In Texas, they call it non-repable. In some states, they don't call it anything, but the VIN number is just canceled. For example, these cars that are junk titles that come out of Washington state are simply sold with a bill of sale only. And many times the buyer doesn't even know that there's something wrong with it.

So, how does this happen? Well, the way that this designation is added to a vehicle record, it's done by an insurance company. When a vehicle is reported as a claim to an insurance company, a total loss claim, the insurance company is allowed to put a designation on the title. They could call it salvage. They could call it flood. They could call it recovered theft. They could also call it parts only. It's up to the insurance company. They are the ones who put this brand label on the title. And they do it based on a number of criteria. It very rarely has to do with the amount of damage. Many of these vehicles that come out of Copart or IAA or one of the insurance auctions that have a junk or parts title are in very good condition, very little damage. Maybe it was a flood car that has a little bit of u corrosion and the floorboards. Uh maybe it's a car with no apparent damage.

First, let's talk about why the insurance company does this. Obviously, when these cars sell at auction, they're going to sell for less than they would if it was a salvage title. So, why would the insurance company shoot themselves in the foot and say, "We don't want to get salvage title money for it." All has to do with liability. What happens is when a vehicle is sold by an insurance company who paid out a total loss claim for the vehicle, the vehicle then is sold at auction. If that vehicle creates any harm or damage or injury to somebody even 5 or 10 years later, that person can go back and sue the insurance company for selling it in the open market. So, the insurance companies have started to say, "Look, we don't want these cars back on the road. So, let's just put junk on it, sell it at the auction, we're done with it." In fact, they're finding that the cars don't sell for much less than they would if they put salvage on it. So, they're not really losing that much money.

So, why would a vehicle sell as a parts only if it's in good condition? Why would the insurance company do that? Well, remember it all has to do with liability. If the vehicle was a flood car, no collision damage, no impact damage, no physical damage, maybe you can tell it was a flood because of the mud line or some other um criteria. The insurance company doesn't know if when it was in the flood if things like the computers are shorted out, if the sensors for the anti-lock brakes were rusted, maybe the impact sensors for the airbags that are in the bumpers in the front and back and in the side, they were also corroded. So, let's say somebody buys that car, they fix it up, they don't replace those sensors, and the airbags don't go off, somebody gets hurt, insurance company's on the hook. Sometimes these in these damages and these corrosion uh events don't show up for a while. Maybe they look nice now, but because they were submerged in salt water or even freshwater, the corrosion might not occur for two or three or four years later. So even if they inspected the vehicle, they wouldn't find it.

Also, an example of a parts only vehicle or certificate of destruction is a recovered theft. Let's say a vehicle is stolen and after 30 days of the car being missing, the insurance company pays the claim to the owner. They give them their money for the car and then another month goes by and the car turns up. People are joy riding it. They get pulled over. They get arrested and the car comes back. Well, the owner doesn't get the car back. Now the insurance company has the car and they resell it at auction. Well, what they don't know at the insurance company is were the airbags taken out of the car? You know, airbags are worth two or three or $4,000 each. So, sometimes car thieves will take out airbags. If there's five airbags in a car, that could be 10 or $15,000 that they could sell in the black market. Insurance companies won't know that. They don't want to take the time to spend a,000 or $2,000 inspecting every vehicle to see if everything's good. They just bring it to the auction and dump it. Pennies on the dollar.

So that is why many vehicles that have a junk title or parts title or certificate of destruction title are in good condition because the criteria the insurance companies use is not based on condition, it's based on liability.

So what can you do about this vehicle? If you purchase one, if you have one, what can you do to get a title? Well, let's take a look at what the rules are and how you can get a title. The short answer is first there is no way to get a title unless you get that junk status removed from the title record. As long as that junk parts record is in the record system, no state in the country, no matter where you go, is allowed to get a title. It's in a federal system called the National Motor Vehicle Title Information System. That's known as the NMVTIS. And this white paper I'm I'm reading from, you can download from our website at cartitles.com. Uh, and you can just click the link. You will be back in your video in just a few seconds. In the meantime, remember that actualhum.com offers you live one-on-one private video consultation with an expert in this exact subject. We want to listen to your story. We want to hear your questions. We want to give you expert advisement of your options and tell you what we know about your particular situation. Now, back to your video and you can download this with more information.

So, the designation on the title record bans that VIN number from any state issuing a title. In fact, every state has connection to the national system. And if you go to try to get a title, they're going to type it in. They're going to look it up. They're going to say, "No, this car is banned."

So, how do you get it removed? The only authority that can remove it is the magistrate. What is the magistrate? That is the county court where you reside. You can file a petition to ask the court in your county to remove that designation from the vehicle. Why would they do that? Well, they don't really have too much of a what they call a dog in the fight, so to speak. They don't really care that much about it. They just want to go by what your petition is asking for. What are they going to consider in factors in deciding that? Well, they're going to consider the condition, also the year, the history of the vehicle, you, the applicant, what their jurisdiction says, what their experience is with these vehicles. And really, it's a personal opinion. The magistrate or judge can look at it and say, "Yeah, I'm going to, you know, there's nothing wrong with this vehicle. I'm going to let this person get a title for it." The problem is you will never know in advance if they're going to say yes or no like any other court case. It's totally subjective.

So if you have a vehicle with a certificate of destruction or non-repable or junk title, the only way you can even try to get a title is to first petition the court to have that removed from the title record. If you don't make that effort, you have zero chance of getting a title. Can't happen. It's a federal law.

So, what are your chances if you do it? Well, no one's going to know in advance, but based on polling and asking our clients, it's about a 50/50 chance. If you file a court order title package, you got about a 50/50 chance. Is that good or bad? I don't know. For some people, it's better than nothing. If you have a vehicle that's worth, you know, 3,000 with a junk title or 20,000 with a salvage title or regular title, then it's worth it because it's kind of like would you go to the casino and if you had a 50/50 bet to make $25,000, you'd probably do it.

So, if you do decide to do a court order title, what do you do? What do you need to file? Well, in most jurisdictions, there are four documents that need to be filed. Now, keep in mind, these are not pre-made forms like you find at the DMV. Courts do not have standard forms for every kind of case they handle. They handle hundreds or thousands of different types of cases for different people, and they don't have one standardized form for every case. So, you have to create these documents with all the wording from scratch. Those documents are a petition of ownership. You have to petition the court saying, "I want to be the owner. I wanted to get a title." The second document is an affidavit of facts describing what the facts are. The third document is a declaration of interest saying you're not aware of anybody else trying to claim an alternate interest and then also standard title application.

So, you have to prepare all those. You can get more details on how to make up those documents at our website cartitles.com. Remember, you cannot call the court to get more info. If you call the court and say, "Hey, I want to do a court order title." They're going to have no idea what you're talking about because they don't have names for all their different cases. For example, somebody might have a court case saying, "My neighbor's dog bit me on the ankle and I need to get stitches and I want them to pay for it." You can't call the court and say, "Hey, what is your procedure for my neighbor's dog b me on the ankle and I want to get stitches case." They don't have separate cases for every specific type of scenario. So, you have to do this on your own. The court can't help you give instructions on how to do this. You have to just show up with the documents and file them.

Another question people ask, how long does it take? Well, it really depends on how busy the court is in that moment during that week. We have a client we deal with all the time for different types of court documents and they happen to be in a county in Florida and sometimes when we file cases they get it back in three or four days. A month later they could file a case and get it back in five or six weeks based on how busy they are. So you're never going to know in advance how long it's going to take. You just got to get it filed and let them do their thing.

Where should you file them? Well, every county has a specific court. Could be called civil court, circuit court, superior court, magistrate court, etc. There's different names for it. Some counties have more than one court, and you have to know which one to file it in. Also, when it comes time to file them, do not bring the documents in person to the court. Always do it by mail. There's a lot of good reasons for that. You'll have bad luck if you bring it in person.

And that brings up another question. Do you have to go to court? Normally, you don't have to go there. This is an administrative process that is done behind the scenes in the office. You have to file the documents, let them do some research. They might email you. They might call you to get information. They might want copies of things like a picture of the VIN number, but everything is usually done remotely. Sometimes when they're done, they want you to come in uh to the to the excuse me, to the lobby and have you sign a form, but that's usually when the case is done. It's not a big production. It's not a big like law and order Jack McCoy type court case. It's an administrative process.

So that's an overview of junk parts only titles. The most important thing is before you can even start doing anything, you have to get that removed from the title record. You have to get it cleared from the title record. And the only way to do that is through a court uh process. More information on that you can get on our website cartitles.com. We also have options for document preparation. If you want to have us do that for you, you can do that. We also have options for filing assistance. We even have one-on-one consultation and advice. So, if you have a specific case you want to talk about, one- on-one video call with myself. You can click the link, schedule a time, and we can do a personalized review of your vehicle, of your VIN number, and of your case.

The most important thing is if you have not purchased a non-repable junk title, we don't recommend buying it because it's going to be a lot of work. If you already have one though, it is worth spending a little bit of time attempting to get that removed because if you can get it removed, you will enhance that vehicle's value by thousands, if not tens of thousands of dollars. We had a client a few months ago who got it removed and his vehicle value went from 5,000 to 30,000 just because of that removal of the brand. So, it is it is a valuable method, a valuable activity to pursue to try to get your title. If you do have more questions, reach us on our website, cartitles.com. We're glad to be of assistance. If you found this video helpful, be sure to click on other videos on our channel to see if there's further information that could give you more insight into resolving your particular situation.