If you’ve ever heard of or been in a situation where someone passes the ownership of a car from one to another without record or ownership, you’ve just been exposed to title jumping. You may also hear the term title floating. It’s all the same thing.
While title jumping is a widespread practice, it’s illegal. In most cases, title jumping is often seen when a vehicle dealer attempts to avoid paying taxes on the car, title fees, or paying for new registration. This occurs a lot with vehicle sellers that don’t have a license. You can find many of these vehicles on marketplaces, which can make things easier to “flip” the title without registration. The car is purchased for cash, and then they resell it with no title.
Is there a difference between title jumping and skipping?
Skipping car titles is a little different than title jumping. Title jumping occurs when you sell a vehicle and don’t take the time to transfer the title into the other person’s name. On the other hand, skipped titled, the seller and first buyer of the vehicle fill out the paperwork but skip registration. The car is never properly transferred, which could also happen if the new owner tries to sell the car again.
Why is title jumping bad for buyers and sellers?
For buyers, if you purchase a vehicle from someone and the car is not registered in their name, you’ll go through a lot trying to transfer ownership legally. It’s a lengthy process that can be avoided if the person has the title with their name. If you purchase a title-jumped car, you don’t know how many others previously owned the car. That means you could buy a vehicle with extensive damage.
For sellers, this is just as bad because they knowingly and willingly break the law. While there may be a small window of time to register or place the car title in your name, it should get done as soon as possible. Attempting to sell a car that isn’t registered in your name means you can’t legally transfer ownership or sell the car. If there was any doubt, title jumping is a felony charge.
Dealing with title jumped vehicles
You'd have immediate issues if you were unfortunate enough to purchase a title-jumped car.
Locating the previous owners will take time and money. When deciding whether to purchase a car from someone, ask to see the title and registration to make sure the name matches.
The only time when someone else can sign over the car title is if that person is acting in good faith as a power of attorney over the owner on the car title. The proof of power of attorney should be presented during the sale.
A power of attorney is the designated person required to register your name on the title. If the title is lost for any reason, it’s time to do your due diligence to ensure the car is not title jumped. If this happens, ask the seller to request a duplicate title for the transaction to be completed.
What are washed titles?
Vehicles with washed titles mean the history and identity of the car are erased. You won’t know the condition of the car you’re trying to purchase because all the information on the vehicle and its history has been erased. While laws protect consumers from buying damaged cars, if the title is washed, you won’t know what happened to the car – whether it has been in an accident, flood, or worse.
People have different ways to wash titles, including relocating the car to a different state, withholding the car’s history to get a new title, altering the title, or creating a fake car title. Like title jumping, washed titles are illegal and are a felony.
So, what happens if your car is title jumped?
If you purchased the vehicle and the car title doesn’t have the seller’s name listed, there are a few things you can do to remedy the situation:
- If it was a transaction from a private seller, ask them to transfer the title of the car into their name and then over to you. If they can’t, don’t go through with the deal.
- If you bought the car from a dealership, you could file a claim for a refund or pursue fraud charges.
- Get a bonded title.
What is a bonded title?
A bonded title can be used to replace a car title. The formal name is the Certificate of Title Surety and will look like your standard car title. If a bonded title is needed, it will have that designation on the title. While this can be a solution in some states, not all states allow bonded titles. It’s important to research whether the state you reside in or where the car is to be sold allows for bonded titles.
If you obtain a bonded title, the “bonded” designation is usually removable from the title certificate after owning the vehicle for three years. 13 states do not allow bonded titles.
The states that do not allow bonded titles include:
- New Jersey
- North Dakota
- South Carolina
- South Dakota
Can I sue someone for title jumping?
Absolutely. You can take the person to small claims court if they refuse to locate the title and transfer it into your name or refuse to provide a refund. Dealerships should provide a refund, but if they avoid the situation, sue them for fraud. While quite a few people initially get away with it, when you sue someone for title jumping and it is proven, the seller can go to jail. Before taking someone to small claims court, consider sending them a demand letter. They may decide to pay you upfront instead of dealing with court.
Are there exceptions? Of course. If the original owner of the car is deceased, the family can obtain the death certificate for you to show as proof to get the new car registration with your name.
Doing the research can help you avoid title jumping or washing. If there is no title or there is an issue, it’s time to dig deeper or walk away from the deal. If it seems too good to be true, it's probably a scam and an indication to look elsewhere for a legitimate deal.