The Expert Podcast

thousands of people every month somehow come across the vehicle with a non repairable or certificate of destruction title that seemingly has nothing wrong with it. so you may have purchased it accidentally not knowing the title maybe you purchased it thinking you could do something with the title but the question comes up is why does this perfectly good car have a non repairable title or certificate of destruction same thing. well non repairable title is actually a representation of an event in the history of the car not the condition of the car and car could be perfectly fine. what happens is the insurance company who has this car on an insurance claim decide whether to put salvage certificate of destruction rebuilt flood whatever this decision they make goes on the title. they don't always make it about what apparently is the condition. let me give an example let's say a vehicle is stolen this happens in our customers experience all the time. we had a customer we talked to recently they had a two thousand eighteen Cadillac escalade had eight hundred miles on it was like brand new. the only thing wrong with it was the radio was damaged someone tried to steal the radio and damaged the dashboard everything else is perfect the wheels tires everything was fine. what happened was the vehicle was stolen from a Cadillac dealership off their lot brand new car the vehicle was missing for months. so after thirty days the dealership put in a claim as a stolen vehicle to their insurance company the insurance company paid the claim a hundred percent seventy two thousand dollars for this car. one month later the car turned up it was recovered theft was actually hidden in a warehouse somewhere. well the car didn't seem like anything wrong with the insurance company now owns that car doesn't go back to the dealership the insurance company owns a car they paid already for the car. well the insurance company looks at it might seem fine but because it was a stolen car in and out of custody for two months they don't know what happened to it. did somebody still their bags out of it did they tamper with the anti lock brakes did they change the sensors for collisions on the car. since they don't know what happened to it they're liable if they sell it and it was back on the road god forbid five years down the road somebody crashes that car and the airbags don't deploy and somebody gets killed or injured they're going to sue the insurance company who allowed it to go back on the road. so guess what the insurance company does they stamp it non repairable certificate of destruction so that way the car will never go back on the road. might be perfectly good car but it doesn't go back on the road because insurance companies have liability. in fact certificate of destruction and non repairable really didn't start happening until the mid two thousand two thousand four two thousand five. it really didn't start becoming a large volume thing until you know two thousand ten or eleven or really even two thousand twelve five or six years ago. and the reason why is because a lot of these cars were sold salvage titles back in the nineties and the even in the two thousands people are buying them somebody would fix them up a little bit maybe don't put the air bags back in maybe don't fix the frame the right way and they would sell and then people drive it. two three five six years ago by nothing happened then somebody gets an accident and they find that part of the reason for the injuries of the damages was because the car had this prior events and that accelerated the damages or made the injuries worse. and what happens is the insurance companies are getting sued for tens of millions of dollars so at some point in the you know around two thousand ten they said oh wait a minute we're just gonna stamp everything certificate of destruction anything that there's any question about. the car could be perfectly fine the car could be you know appear to be in good shape but the insurance company doesn't know. maybe it's a flood car don't know how high the water came up. the thing is they don't have the time to go through every car with a fine tooth comb because it would cost them hundreds of dollars to have a certified mechanic check everything on the car. so they just stamp is sort of a certificate of destruction not repairable and sell to Copart or IAAI and sell to a salvage house. well they might lose money on it because if they have a salvage title it might sell for a little bit more and than a certificate of destruction. but they don't care because for the two or three thousand dollars less than the cells for they're saving millions on liability down the road. so it's not really insurance companies fault it's the fault of the liability claims that they're paying out for people getting hurt. here's the other thing they're finding now that many of these cars a certificate of destruction are not selling for that much less at Copart then a salvage title. because most of the people who are buying these cars at Copart they're just taking apart anyway even a salvage title they're just taking the parts off the car and reselling as parts. there's these large auto parts operations that are nationwide these people fly all over the country their jets and they buy these cars from Copart sometimes the buy them on line then you have to travel. and they know that they have this escalade they take the motor they send it to Chicago the transmission goes to Boston there the front clip goes to Dallas or whatever it is they have these very sophisticated computerized systems that know where to put all the parts and sometimes they can get more for the car then even trying to put it back together as a car in on the road. so almost all the cars are going for parts anyway salvage title certificate destruction doesn't matter they're being taken apart so the title doesn't matter so we're finding that more and more cars at a Copart or IAAI the other auction are showing up with a certificate of destruction because there's no downside for the insurance company it's not like they're getting less money for these vehicles and there eliminating the possibility that they're going to get sued for ten million dollars because some poor family ten years from now gets an accident with this car and gets killed because of no air bags in the car. right so you may see these cars looks perfectly fine it's like why that can't get this car road is nothing wrong with that well maybe there isn't maybe there is and you just can't see it. but even if there's not the insurance company didn't have the benefit the you did of spending a month looking at this car searching it checking everything out because they're not going to spend their time for their adjusters to check out cars when it's really not gonna make any more money just put as a salvage title rather than a non repairable. so there's your answer certificate of destruction it's a death sentence for a car you can't sell it I mean I'm sorry can't register you can't put it back on the road it's only supposed to go to a junk yard the best thing to do is take the parts off and sell it or trying to sell to a junk yard as for as much as you can because it's a permanent record on that vin number all fifty states D M. V. are notified of that vin number never issue title for and it's into it goes into a national database called the NMVTIS national motor vehicle title information system. that says that the number is canceled it's a death certificate for the car don't ever put it back on the road. so that vin numbers is eliminated as a viable vehicle for the road and nobody can change that to permanent record anybody who says they can change it for any amount of money they can't do it because it's even it's a federal crime even to try to wash a title. it wouldn't succeed anyways but even trying to do is a federal crime so certificate of destruction non repairable permanent it's for a reason may not agree with that in many cases we don't agree with it because the car is perfectly fine but the insurance companies from experience no they're gonna lose tens of millions of dollars if they let too many of these cars go back on the road and have some injuries later. good luck