The Expert Podcast

If you have one of these Certificate of Destruction documents that you bought from Copart or IAA, maybe your document says non-reparable title. Some states call it that; some states call it junk title or parts only. You're probably starting to realize there might be problems. You're starting to worry that your purchase of a vehicle might have some problems. What do you do?

A Certificate of Destruction is a type of ownership that is issued by an insurance company, and they do it for a particular reason. It doesn't matter how much damage is on the vehicle. It doesn't matter if it's drivable or in good condition. They do it for a certain legal reason, and it puts you, as a buyer, possibly in a bad situation. So, what are your options? What can you do about this? We'll talk about what your options are in a minute.

A lot of times, clients who call us up are wondering: Why does my car have this that I bought at Copart or IAA, or maybe you bought it on Craigslist or Facebook, and why is the DMV telling me that I can't get a title? There's nothing wrong with the car; it's in great shape. Well, what's happened is that the insurance company that owned the car before you, that sold it at Copart, had paid out a claim on this vehicle. It may have been a collision claim, a flood claim, or a recovered theft claim. Maybe somebody stole the car and did a joyride for two months, so they paid off the owner, and then the car was discovered, and they got the car back.

So now the insurance company has a car that they own. They already paid the owner of the car, the last title owner, and they don't want cars. The insurance company's not in the business of having cars, so they sell them at a salvage auction or an insurance auction like Copart or IAA. Now you buy it, and you say, well, certificate of destruction or non-reparable, no big deal; I'll just get it inspected like a salvage title. Well, you find out that the DMV or the titling agency in your state says no, this car is not eligible.
How come? Because it's a Certificate of Destruction, and what has happened is that serial number, that vehicle identification number, or VIN, has been transmitted to a national record system called the National Motor Vehicle Title Information System (NMVTIS). That is connected to all 50 states' DMV, plus Guam, Puerto Rico, and Washington, DC. So the entire country has that record in their system that this car, or truck, or trailer, whatever it is, is a Certificate of Destruction or non-reparable or junk, whatever the state calls it. Every state has a different name for this type of vehicle.

Why would the insurance company do that? Well, if the insurance company calls it a salvage title, you can fix it up, get it inspected, and it can go back on the road. If the insurance company calls it a Certificate of Destruction, you can't put it back on the road, meaning that the insurance company has no liability. If you put it back on the road as a salvage title, the insurance company could get sued five or ten years later by some owner driving the car, and maybe the wheel falls off and they get hurt, and they sue the insurance company that sold that car at Copart, saying you should have never let that car go back on the road; it was dangerous; you knew better. You paid a full loss claim, you knew it was a total vehicle, or you knew it was a flood vehicle, or you knew it was stolen, and you don't know what happened to it. Maybe the airbags were taken from the car, maybe the anti-lock brakes were tampered with, or maybe it has frame damage. You knew there was something wrong with that car; you proved it by paying a full total loss claim to the owner, and you let it go back into the public. We're going to sue you. And the insurance companies were losing tens of millions of dollars on these lawsuits.

So they came up with this Certificate of Destruction, junk title, or parts-only title. Every state has a different word, so the insurance company now has no liability and can't go back on the road. So what do you do if you buy one? Well, you have a few options, and if you want more details beyond this video, you can click the link below. You can schedule a live consultation with a certified title agent—it could be me, it could be one of our title agents—to go over your particular vehicle, because some vehicles are a little different than others, and some vehicles have different histories than others. So you'll get some basic information from this video, but you can also arrange a consultation at the link below.

So that VIN number is poison. The DMV has it in their system in all 50 states. So what can you do? Well, you can reconstruct it into what's called an assembled vehicle or a kit car. That's option number one. You can use it as a vehicle to sell into a jurisdiction that doesn't recognize non-reparable or junk titles. You can take the vehicle's major components and use them on a VIN-number vehicle that is eligible for a title. Those are your main options. Now, you may not want to do those things. You might just want to sell it as is, but definitely consider all of the options you have before you make any decision about the vehicle.

The one thing you don't want to do is try to do any kind of VIN tampering where you switch out the VIN from that car and put another one on it. Highly illegal; it's a federal crime. In most instances, it's a federal felony, and they'll find out because when the vehicle at some point is inspected, or even if it's not, when you get pulled over, the VIN number has certain types of rivets, and they're going to see that it's been tampered with, and you'll get in trouble. Lots of people get in trouble for VIN tampering, so don't do that.

Also, don't fall for one of these services where they'll try to flip it around from five or six different states to try to catch them off guard and get a title for it, because what'll happen is that's called title washing. That's also a crime, and eventually it will catch up and the title will be revoked. Even if you've already sold the vehicle, when the title is revoked, the person who bought it will trace it back. Whoever did that title washing can get into trouble. So those are a couple of dos and don'ts. Again, for more details, you can reach our website, cartitles.com, or click the link below for a more thorough discussion of your particular vehicle. If you arrange a consultation, have your serial number handy. We can look it up in the system and see what else might be going on with that particular vehicle.