The Expert Podcast

Be aware we're already starting to see some of these flood cars from Hurricane Ian coming through the system. We had a call earlier today from a customer who purchased a vehicle from Copart that was a Florida certificate of Destruction vehicle. When they were sold the car, it came through a broker. It didn't come directly from Copart because they were a civilian — they were not a legal licensed automotive dealership. So a lot of civilian consumers buy cars through a broker and they're not made aware that just because you're getting a bill of sale or not getting a title, that this vehicle has been through the non-repairable certificate of Destruction or other type of designation.

What does that mean? Well, many times insurance companies will put a flag on a VIN number that cancels that VIN number from being used as a title. And a lot of times, the vehicles are in perfectly good shape. This particular vehicle the client was calling about runs, drives — nothing wrong with it. It had a little water line around the sill plate where you can tell where the flood came in on the vehicle, but there was nothing mechanically wrong with it. The interior wasn't damaged by water. So they were confused: I bought this car, I paid good money for it, why can't I get a title?

You got to remember that a certificate of Destruction has nothing to do with the condition of the vehicle. Insurance companies routinely take perfectly good vehicles with no damage, no major defects, and they cancel the VIN number from being used for a title. By "cancel," it means that all 50 states in the U.S. are notified of this VIN number being ineligible for a title.

Why would they do that? Why would they take a perfectly good car and remove it from eligibility? Well, the reason is liability. Because if that car goes back on the road and five or ten years later somebody gets in an accident, they get hurt, some attorneys can go back and look at the title history and see that some insurance company — Geico, Allstate, Progressive, whoever — at one point took that car, paid a claim, and then resold it through Copart and let it go back on the road. And they're going to say, “Well, the flood rusted out the anti-lock brakes. That's why this accident happened.” Or they're going to say, “The water damage shorted out the airbags, so the airbags didn't go off. Somebody got hurt.” And they're going to go back and they're going to sue that insurance company that sold it at Copart.

So what does the insurance company do to make sure they don't get sued? They just cancel the VIN number. They make it parts only, export only, junk. And you gotta remember that designation isn't a description of the condition of the vehicle. It's not a challenge for you to prove otherwise. It's what they're saying they want to have happen with it.

Some states call it non-repairable. The state of Texas calls these vehicles non-repairable. So if you buy a vehicle that says non-repairable, a lot of buyers look at it like a challenge — "No, I can repair that car, it's not non-repairable, I can fix it." Well, that's not what non-repairable means. It means that they're not going to let you repair it. They're not going to let you fix it. The VIN number has been transmitted to all 50 states’ titling divisions, plus Washington DC, Guam, and Puerto Rico telling them: do not let this car be titled.

And it's a travesty because many of these cars are in good condition. But it doesn't change the fact that the insurance company is permanently canceling that VIN number. And it's irreversible. It can't be undone. You can't petition them to change it. You can't fix it and make the DMV change it.

So again, we're already starting to see some of these from Hurricane Ian. There's going to be — no pun intended — a flood of these vehicles coming into the marketplace through Copart or IAA or some of these other auctions. Be aware that if you're purchasing a vehicle from a salvage auction, there's a chance that the vehicle is not eligible for road use. Even if it's a salvage title, technically you can take a salvage title, fix it up, get it inspected, put it on the road. But 50% of salvaged vehicles can never go back on the road — even if it says "Salvage" on the title.

Many of them, you can't get the inspection approved. Why not? Well, because sometimes when the inspector looks at the original repair damage history of that vehicle, they see what needs to be fixed. If they don't consider that your repairs are proper, they're going to flag it.

Here's another thing you have to remember: the DMV and the inspectors — they don't want these cars back on the road. Even if technically their law says, “Well, if you fix it up and we approve it, you can make a rebuild title,” the inspector does not want that car on the road. The DMV does not want that car on the road. Nobody wants that car on the road — except you. So you're fighting an uphill battle. Everybody that you're gonna have to deal with is gonna try to look for a way to keep that car from going on the road. And one little thing wrong, one paperwork error — and you're done.

In fact, some states require that if it's a salvage title issued from, let's say, New York, and you live in Illinois, you can't get it inspected in Illinois. You have to bring it back to New York. Some states require that the state that issued the salvage has to be the state that does the inspection. And you might not be able to do that.

In addition to the repairs, you have to have all the right paperwork showing that all your parts came from proper sources and that all the right parts were put on — even computer chips. Even if there's a dash light on that says "check engine," sometimes that will fail your inspection. Because that computer chip is considered to be part of major component parts that are crucial to the operation of the vehicle.

So you're taking a risk. You buy a salvage vehicle — you're taking a risk. If you buy a junk certificate of title vehicle or certificate of Destruction — it can never go back on the road. It's not a risk, it's a certainty that you can't put that car back on the road.

Check out our website junktitle.com for more information about maybe getting a new VIN number — but that's a whole other subject of conversation.