When you are in the market for a used car, you have a lot to consider. Like the average consumer, you want something that suits your style and is mechanically sound. Plus, you surely want to save yourself some money in the process. When a deal comes along which seems too good to be true, you need to trust your instincts. It could actually be a salvage car that received a clean title due to a Minnesota title loophole.
We’ve got all the information you need about this flawed system and how you can protect yourself. After all, no deal is worth you putting yourself at risk.
What is the Minnesota Title Loophole?
In Minnesota, cars that are at least six years old or worth less than $9,000 can receive a clean title even after a serious accident. Worryingly, these cars don’t require any type of inspection before they are rebuilt and sold to unsuspecting buyers. However, this damage would still appear on VIN checks.
Taking that one step further, people can bring salvage vehicles into Minnesota and be issued a clean title in return. Scarier than that is the fact that this also applies to flooded cars and cars sold at auction. Any car that fits the criteria gets a clean title regardless of damage! Considering the hurricanes which occurred during the past few years, many flood damaged vehicles have made their way back into regular ownership because of this Minnesota title loophole.
The best way to avoid this is to get a detailed VIN check and a quality pre-purchase inspection on any vehicle you intend to buy. Even a title that was sent through Minnesota will still reflect damage in the car’s history record, and a sudden transfer to Minnesota in the car’s history might be enough to raise concerns on its own if the vehicle has signs of prior repairs.
What is Happening with Flooded Vehicles?
Cars that sustain flood damage tend to feature waterlogged computers and often have short circuits in the electronic sensors. This usually affects safety features like the airbags or braking systems without any warning signs. Automotive Fleet noted that there was a 47% increase in the number of flooded vehicles on the road after recent hurricanes, and some almost certainly made it to Minnesota to receive seemingly clean titles.
Why are so many of them making their way into Minnesota? Because of the Minnesota title loophole laws. Dealers are going to auctions and bringing back these damaged cars to sell to unsuspecting victims.
What the Minnesota Loophole Means to a Car Buyer
The trouble is that the oldest and most damaged cars in Minnesota are meeting the criteria of this loophole, so they fly under the radar with a clean title.
Because sellers are marketing flooded and damaged vehicles as your run-of-the-mill used cars, it’s difficult to protect yourself. The average person relies solely on what they see to judge a car’s quality, and in the case of the Minnesota loophole, the title looks clean at first glance.
What you may not see is serious damage that’s not initially visible. For example, a flooded car might have a rusted undercarriage, mold under the seats or electronics that could short-circuit at any time. Luckily, any previous damage claims will be stored in the vehicle’s record accessible via our VIN check.
Unfortunately, damages are not always reported. It’s best to pair an accident report with a pre-purchase inspection by a trusted local mechanic to uncover any issues.
How Car Titles are Hidden in Minnesota
People looking to scam buyers tend to use some cheap cosmetic upgrades and a form of title washing to hide the car’s sordid past. Because some states require the terms “salvage,” “flood damaged” or “rebuilt” on the title, these schemers will move the car around to various states before titling it in Minnesota where the physical title won’t tell a tale.
That’s because a Minnesota title doesn’t reveal the original or previous owners of the vehicle. It will only show the current owner. So, if a flooded car makes its way from Texas and takes a stop in Kansas before heading into Minnesota, you’ll be harder pressed to know that it originated in an area devastated by flooding.
Minnesota state patrol keeping an eye out in 1993. Source
How to Outsmart the Minnesota Loophole Scammers
If you are in the market for a used car in Minnesota, or a car with a Minnesota title is for sale in your area, you must protect yourself. The Minnesota title loophole isn’t something the average consumer is aware of but trust us – the person looking to rip you off knows all about it. That’s why you need to take action to ensure you aren’t taken advantage of.
Check the Vehicle’s Title
You have to do your homework to ensure the title is clean. Taking the time to do a complete VIN check will help you to understand the history better.
Get a Full Pre-Purchase Inspection
Auto detailing conceals the condition of many cars, but it won’t eliminate the signs of damage if you know where to look. If you aren’t comfortable doing an inspection, feel free to take your mechanic along for the trip or test drive the car over to them for a pre-purchase inspection.
Here are some places you’ll want to examine closer:
Check the carpet under the seats and in the trunk. Look for any sign of dampness, mud, mold, rust, or silt as this could indicate previous flooding. Check the glovebox and trunk, too.
Make sure you test all the electronics such as the air conditioner, radio, windshield wipers and door speakers.
Check under the car for any signs of flaking metal or rust. You can also check the under the dashboard and the springs under the seats.
Mechanics and keen car buyers will also look for the following:
Signs that the car was painted to hide body damage
Signs of frame straightening and other serious repairs
Replaced items such as seats, carpeting, and smaller electrical components
Ask for Proof of Repairs
If the seller tells you the car had minor damage, ask for the proof of repairs to see what was fixed. If receipts are unavailable, call the shop they took it to. Compare the facts you have gathered against the facts of the VIN check and discuss any discrepancies.
Take a Test Drive
If the owner insists on taking you for a ride in the passenger’s seat, this is a huge warning sign. You want to personally get behind the wheel and feel the car on the highway, on city streets and over hills. Test out the brakes hard to ensure they don’t lose any pressure and floor the throttle to make sure the engine responds healthily – misfires and stutters should be nonexistent.
Avoid Buying Online
Because you can’t physically inspect the car or take it for a test drive, it’s not often recommended to buy a car online except from the most trusted sources. Too many schemers hide their junk cars in online ads to rip people off. Of course, it’s perfectly acceptable to buy a car you see online if you can first inspect it properly and take it for a test drive, or if you can have those things done by someone who is local to the seller.
Trust Your Gut
Overall, you need to listen to your instincts. If something doesn’t feel right to you about the car or the seller, walk away. It’s not worth the headaches you could experience down the road.
While saving money is essential, you need to be conscious that most times something is too good to be true, it’s generally not a good idea to buy. Because of the Minnesota title loophole, too many damaged and unfit-to-drive cars are on the road with no regulations. This is dangerous to the consumer and could result in your spending far more than you planned, but by equipping yourself with the tools in this guide you will be prepared to make an educated decision.
Take your time and perform due diligence on any vehicle you want to purchase. Even if you spend a little more now, you might save yourself the trouble of attempting to repair body damage or electronic failures in a few months. We suggest using our detailed VIN check to gather the facts – this quick and inexpensive service will uncover signs of the Minnesota title loophole, potentially saving you thousands.
Dirt Legal offers VIN Checks and title replacement for cars, motorcycles, and almost anything with wheels. We are not attorneys. This article is not legal advice.
Cover image copyright Dirt Legal
As many as 1 in 325 cars in the US may have a fraudulent title that has been washed.