By Ali Koomen, who spent over a dozen years in the car business

Buying a used vehicle just got a little safer, thanks to a new federal law known as the National Motor Vehicle Title Management System, or NMVTIS. It has been a long time in the making, but within the year it should be fully operational in all fifty states. This system, operated by the Department of Justice, is a nationwide database that provides information that can alert buyers, sellers, insurance agencies and government agencies as to problems in a vehicle’s title.  This type of information is currently not found in car history reports from companies like Carfax or AutoCheck.

Under this law, salvage yards and insurance companies must now report vehicles that have been ‘totaled’. This will help in putting a stop to vehicle cloning (stealing one car’s identity to exchange it with a stolen or totaled vehicle) and title washing (moving a totaled or flood-damaged vehicle’s title from one state to another to remove the ‘salvage’ designation from the title.

Salient points that will be checked under the new law include checking the current and previous state of title, the date the title was issued, the most recent odometer reading, all histories from auto recyclers or junk yard history for the vehicle and insurance company history for the vehicle if totaled.

This system makes it much easier for many businesses and forms of government to scan the vehicle history and make certain it has a clear, clean title before a new one is issued. Each state’s Department of Motor Vehicles will use this invaluable tool to help stop fraud. Law enforcement officials will be able to instantly check if a vehicle involved in a traffic stop, crime or accident has been stolen. Automobile dealerships will be able to acquire complete title histories on both the units available for resale as well as vehicles taken in on trade. Insurance carriers will have easier access in making certain a car is what the insured claims it is, and will help in reclaiming stolen vehicles that may otherwise have gone undetected. Best of all, the law helps protect vehicle buyers, by making sure that the car being purchased is not stolen and that it has not been totaled or has a salvage title.

States participating in NMVTIS have found it to be a very helpful program. One of the most impressive statistics is that the state of Florida was able to use information from the program to crack a car theft ring responsible for over $8,000,000 in luxury vehicle thefts. The state of Virginia has realized a near-17% decrease in vehicle thefts, and participating states overall have saved money that would have otherwise been lost to insurance fraud, cloned vehicles, stolen vehicles, odometer fraud, fraudulently titled vehicles and more.

Until the program becomes fully operational nationwide in January of 2010, states that are currently non-participatory are expected to have a sharp increase in vehicle thefts, title washing and cloning. The states currently not using or reporting to the NMVTIS are Alaska, Connecticut, Colorado, Hawaii, Illinois, Kansas, Maine, Maryland, Mississippi, North Dakota, Oregon, Rhode Island and Utah as well as Washington, DC.

Further information on the program can be found at http://www.ojp.usdoj.gov/BJA or at http://www.nmvtis.gov.  Using this information and supplementing it with car history reports from companies like Carfax or AutoCheck will make it easier and safer to buy a used car.  For more info on car history reports, see our recent article on Car History (CarFax) Reports Explained and How You Should Use Them.

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