What Kind of Auto Theft Isn't Covered by Insurance?

By Catherine Powell

Image courtesy Pixabay

Only once have I had to deal with the theft of my car.  That was way back in 1997, when I awoke one morning to discover my Jeep wasn't parked in my driveway where I left it the night before.  Two calls later; One to the police and the other to my insurance agent and the problem was soon solved.  No, I didn't get my Jeep back, although the cops eventually caught the culprit and recovered the vehicle.  By that time the insurance company had cut me a check and I purchased another car.  But it was sure nice to find out that I wasn't on hook for the balance I owed the lender.  I even walked away with enough to put a $1,000 down payment down on my new ride.  That isn't always the case for victims of auto identity theft.  This is a high-tech crime that involves forged documentation intended to get you to plunk your hard-earned cash down on a stolen vehicle.  So prevalent is this form of fraud that even some dealers have been duped.  If this should happen to you, not only will you be out the purchase price, but the cops will confiscate the vehicle, leaving you with no cash and no ride.  To keep you from falling into this money pit, I've come up with ten tips designed to help you recognize this 21st Century ripoff before you get taken to the cleaners.  

#1: Send in the Clones - When it comes to buying a used car, there is much to be cautious about.  That's because wily thieves can easily sell you a stolen car without you knowing it until you try to register your vehicle.  Then you'll find out that not only can't you get your purchase licensed and registered, the police will confiscate the vehicle leaving you out both money and wheels.  (You may even be arrested and face criminal charges.) One of the easiest ways for crooks to pass off a stolen ride to an unsuspecting buyer is to clone another vehicle's registration stickers only to paste them on the one that was stolen.  Unless you take the time to compare the VIN number on the door to the one that's attached to the area between the dashboard and the window on the driver's side of the vehicle, you could be duped.  While the laser etched plate on the dash can be forged, the fasteners used to hold down the dashboard VIN are specialized rosette rivets that aren't available to the public.  Another telltale hint that the VIN number has been replaced is if you spot glue, or paint on or around the driver's side door jamb, indicating that the VIN is bogus. 

#2:  Who Really Owns the Car? - Even if the car you purchased isn't stolen, that doesn't mean that the person who sold it to you owns it outright.  If the car was originally financed, the lender owns the car until the loan has been satisfied.  If you purchase a vehicle that still has a lien on it, you could wind up having to pay the lender off to get the title to the vehicle.  One way to avoid having this happen to you would be to obtain a VIN report from the DMV or purchase one online.  This will let you not only know if the seller actually owns the vehicle, but it will also let you know if it was ever stolen or involved in an accident.

#3: Counterfeit Titles - Another document that can be faked is the title.  Just because someone is willing to sell you a vehicle doesn't necessarily mean that it's owned by the seller.  One way to avoid getting duped is to scrutinize the title carefully.  A legitimate car title can't be produced on a computer printer.  That's because it contains both a watermark and a raised seal provided by the state. If you aren't familiar with what a title in your state looks like, a quick Internet search will help you determine what the real deal looks like.  Then you can compare this with any title you are shown.  You can also research any title via the National Motor Vehicle Title Information System.

#4: Title Washing - Another title scam involves altering the information contained in a clean title.  The reason buyers do this is to conceal any major problems with the vehicle or to conceal the fact that the there is an outstanding lean.  It's even possible that the title in question is what's known as a salvage title which is issued when a vehicle is declared a total loss by the insurer.  If a car has a salvage title, it's illegal to drive it on the road.  If a totaled vehicle is later repaired, it will be issued a rebuilt title, which can then be insured and driven on the road.  Either way, you're dealing with a salvaged vehicle that could come to cost you dearly down the road. 

Image courtesy Pixabay

#5: Fake ID - Another way to swindle a buyer is to produce a bogus driver's license.  Fake identification has been around for decades.  However, with the advent of 21st Century technology, fake IDs have never looked so good.  So much so that even the police in Florida have had to run the license number to see if the license is real or fake. There's a cottage industry in China and India that offers picture perfect fake IDs that can be purchased with the click of a mouse.  These phony Florida licenses are so good that they can even fool the cops since the fakes include a picture perfect facsimile of the Florida State hologram.  With that being said, if a car thief finds the owner's registration and insurance card in the glove box, all they'd have to do would be to order a fake ID with the real owner's name and address to fool a buyer.  The best way to defeat this kind of fraud is to go to the Florida Department of Highway Safety's website where you can enter any Florida driver's license number to see if it ' legit or not.

#6: Additional Proof of Ownership - One way to spot a con is to ask the owner for the vehicle's maintenance records.  If the owner can't produce them, then this is a big red flag.  If they can, make sure you confirm that the records agree with the vehicle's make, model, color, and VIN number.  

#7: Request a Pre-Purchase Inspection - Before you plunk down thousands of dollars to purchase a used car, ask the owner if he or she would be willing to have the car inspected by a professional.  Then call your insurance company to ask if they're willing to inspect the vehicle so you can have it insured.  You can also ask your auto mechanic to give the car the once over to make sure everything is as it should be before you purchase a vehicle you know so little about.  If the seller balks about allowing you to have the inspection performed, then your best bet is to walk away from the deal before you wind up buying a stolen car.

#8: Too Good to be True? - Do your homework before you contact anyone selling a used car.  With a few keystrokes, you can determine the approximate price of any vehicle.  If the price being offered by a seller for a used car is too good to be true, it means that the vehicle is either in poor mechanical condition, or it was stolen.  Vehicles can have their odometers rolled back, they could have been severely damaged in an accident, or they can be salvaged after a flood.  The way to avoid these problems is to steer clear of any used car deal that sounds too good to be true.  The second is to obtain a CarFax so you can find out about a vehicle's history.

Image courtesy Pixabay

#9: If You Buy a Stolen Car - Should you ignore all the warnings I pointed out above and accidentally purchase a stolen vehicle, you're in for a world of hurt.  As soon as you try to do a title transfer, the police will be notified.  You could very well be arrested on the spot.  The vehicle will be immediately impounded. You will need to hire an attorney.  Even if you aren't charged with the theft, you can still be charged with possessing stolen property.  Expect to spend quite a lot of time in court.  How you get there is up to you, since you no longer own a car.  Your chance of recovering the money you spent to acquire the vehicle is zero.  Your insurance company will not pay you a dime, since a policy can't be issued on a stolen vehicle.  

#10: Even Dealers Get Scammed - Not only do dealers occasionally wind up purchasing a stolen vehicle, there have been occasions when they've resold them to customers.  In 2022, a Florida couple was shocked to learn the Ford F350 they bought from a dealership in Fruitland Park was stolen from a Colorado dealership.  When they took the vehicle in for an oil change, they were informed that the VIN number was a fake. According to a blog by TV station WESH, "Over three months after buying the truck, the Haines' said the dealership was not helping them and they are still on the hook for the loan for tens of thousands of dollars plus their down payment and modifications they made to the truck."

As a result, the couple was forced to sue the dealership that sold them the stolen truck.  After the story hit the media, the dealer agreed to settle with the couple.  

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save on flood insurance, check out her website at http://aplusallfloridainsuranceinc.com/