As with other consumer protection laws, California has been a pioneer in protecting the unsuspecting public from auto-related fraud. In 2012, California became the first state to enact a salvage-specific law. Californians live in the largest used car market in the country, and while that suggests, on one hand, that the selection of quality used vehicles is larger than in other areas, the size of the market is also due to the high volume of damaged or defective vehicles imported into the state. Fortunately, the relatively new salvage title law provides consumers with fairly strong protections against unknowingly purchasing junked or substantially damaged vehicles from new and used auto dealers.
While private sellers are not required to make the same disclosures, the salvage title law requires California dealers to check a used vehicle's title through the National Motor Vehicle Title Information System (NMVTIS), which is maintain by the U.S. Department of Justice and maintains reported title information for vehicles across the country. All auto insurers, junk and salvage yards, and state motor vehicle departments are required to report updated title information every 30 days. Based on the title information in a vehicle's history report from the NMVTIS, the dealer may have to take additional steps regarding how it advertises the vehicle or what it discloses to its prospective buyer.
Significantly, the law also requires new and used auto dealers to place a black-on-red sticker notice on the windshield of any auto having a salvage, junk, or flood title. In addition to clearly posting a language-specific notice on all salvage vehicle under the salvage title law, dealers are also required to provide a full and accurate vehicle history report from the NMVTIS. It is critical that the dealer-provided vehicle history report is from the NMVTIS since the NMVTIS is the only place with a nation-wide mandatory reporting database. A dealer may supply a prospective buyer with a CarFax or other vehicle history report in addition to the the NMVTIS report, but since these other private reporters are not required to update their databases as frequently as the NMVTIS, they do not satisfy this part of the salvage title requirement.
There are a couple of easy precautions one can take to avoid being misled into unknowingly buying a salvage or junk title vehicle from an unscrupulous dealer. First, be sure to reference the vehicle identification number (VIN) on the vehicle itself and make sure it does not appear altered. Do not simply rely on the VIN on the NMVTIS report provided by the dealer. Second, in addition to verifying the VIN on the vehicle itself, it is prudent to check the vehicle's history with the NMVTIS directly. Also remember that private sellers are required to be honest in their representations when selling a vehicle but do not have the same disclosure requirements as dealers, so a buyer should always obtain a vehicle history report from the NMVTIS prior to purchasing from a private seller.