ST PAUL, Minn. — By an overwhelming margin, Minnesota lawmakers have voted to close a gaping legal loophole that allowed potentially dangerous cars – totaled by insurance companies – to be resold with clean titles.
When KARE 11 Investigates first highlighted the problem in 2017, experts said it was making Minnesota a Mecca for rebuilt wrecks.
“It’s a huge step toward making sure we have more transparency,” said Rep. Cheryl Youakim, the DFL sponsor of the new law in the Minnesota House.
“It’s a great bill that really closes that loophole that we’ve had before,” said Sen. John Jasinski, the GOP sponsor in the state Senate.
They were members of a Salvage Title Task Force that crafted a bipartisan bill. After years of deadlock on the issue, their reform bill passed both chambers without a single no vote.
‘Risking my life’
Four years ago, KARE 11 revealed how thousands of Minnesotans – like Marissa Cartwright – were driving cars with hidden histories.
“I was risking my own life every time I got into my car,” she said.
“If she would have been in an accident, she could have very easily been killed,” Marissa’s father told us.
Why? Because even though the title didn’t show it, he discovered the used car he bought for his daughter had been rebuilt after a serious accident.
The airbags were never replaced – leaving Marissa unprotected.
A KARE 11 Investigation in 2017 revealed how a car’s true history can be hidden because of a loophole in Minnesota law. It says that cars six years old or older – or worth $9,000 or less – can get clear titles even if they have been "totaled" by insurance companies.
The car the Cartwrights bought is just one of nearly a quarter of a million "rebuilt wrecks" in Minnesota, according to data from CARFAX, a private company that tracks cars totaled by insurance companies – whether the official state title shows it or not.
Even though they were totaled, smashed or flooded, because of the Minnesota loophole many of them have been able to get clean titles – hiding their true histories from car buyers.
Earlier this year, KARE 11 documented how it’s still happening. We checked recent salvage cars for sale on an online auto auction – and found dozens of recent examples of badly damaged cars with clear Minnesota titles.
Here are some examples:
- a Chrysler 200, totaled, but with a clear Minnesota title.
- a Ford Fiesta, totaled, but with clear Minnesota title.
- a VW Passat, totaled, but with a clear Minnesota title.
Online photos show each of them had serious front end damage. None were listed as drivable.
What’s more, in each case their airbags had been deployed.
Just like Marissa’s car, they could be rebuilt and resold with clean titles – hiding their history – even if the airbags were never replaced.
Thanks to the Minnesota loophole, Emilie Voss of CARFAX told KARE 11 the Twin Cities ranks 12th highest in the country for salvage cars – and 9th highest for flood cars – still on the road.
What’s more, experts say soaring used car prices add to the financial incentive to rebuild wrecked cars – especially if the damage history can be hidden with the help of a clear title.
Closing the loophole
The bill that got final approval in the legislature will take effect in January next year and will close the Minnesota loophole.
“It tries to address the title-washing loophole that we have – by requiring a salvage or prior salvage brand on all vehicles that are acquired by insurance companies as a total loss,” Rep. Youakim explained.
“It’s a great consumer protection bill,” Sen. Jasinski said.
They say the new law would put a “prior salvage” brand on the title of older, less expensive cars now exempted by the loophole.
“It doesn’t say the vehicle is unsafe. It just says it’s prior salvage so the consumer can go out and check these things online,” Jasinski said.
Under the new law, the car Marissa was driving – without airbags – would not have gotten a clean title.
Since it doesn’t take effect until next year, however, current used car shoppers still need to beware.
“You could buy a vehicle with a clean title, and it could have a history that you don’t know about,” Voss warned.
No safety inspections
Sen. Jasinski also warns that Minnesota law does not require safety inspections before rebuilt wrecks are put back on the road.
“The state does not do that,” he said. Although existing law requires some newer model used cars to have an inspection, those only look to see if stolen parts were used to make repairs.
The goal is to combat auto theft – not assure safety.
“So, that’s somewhat of a misnomer, that it’s a safety inspection. It is not,” Jasinski explained.
That means it’s up to automobile rebuilders – and ultimately used car buyers – to determine whether a car is roadworthy.
How to protect yourself
If you are considering buying a used car, most experts recommend you take three steps.
First, test drive the car.
Second, check the vehicle history. The National Insurance Crime Bureau has a free website called VINCheck – where you can enter a vehicle’s identification number and determine if it has been declared salvage by any of its participating insurance companies. For a small fee, companies like CARFAX offer much more detailed histories. In addition to flagging salvage cars, CARFAX reports provide a wide range of information including accident histories, service histories, previous odometer readings, open recalls and the number of prior owners.
Third, take the car to a trusted mechanic for an independent inspection. It might drive fine one day, but a trained mechanic may be able to spot problems – including prior flood damage – that may cause problems down the road.
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