Salvage title requirements in MI
December 26, 2013 8:04 PM   Subscribe

I purchased a used car from a family member without running a carfax report. My insurance agency just told me it was totaled before, and when I put the pieces of the story together that makes sense (the family member had told me he had "rebuilt" a part, but that term has not been completely elucidated until now). But the fact the car was totaled is not indicated on the title.

I have no idea where to look for information about this. This makes it seem like if the car was totaled and rebuilt, it needs to be indicated on the title, which it does not appear to be.

What is going on here? Before I approach the family member I want to make sure I have all my facts straight. Is this a "fair" transaction? How do I not have a salvage title if the car was salvaged? The SoS had no problem issuing me the title in my name, and it was issued on green paper, although I think the title before was on orange (I only now know what that means).

Honestly, I am just very confused and any links or information would be helpful. I am not sure if I have been wronged by this family member, and nor am I sure that this vehicle is even street legal (as a rebuilt car needs to be inspected).
posted by anonymous to Law & Government (3 answers total)
I don't see where your family member did anything wrong, but it sounds like the new title might've been handled incorrectly. Aside from that, we can't possibly glean enough information from your question to guess whether the transaction was "fair" to you, since we know neither what you got nor what you paid for it. A vehicle with a salvage title is worth less, but not worthless.
posted by jon1270 at 3:56 AM on December 27, 2013 [1 favorite]

I'll chide you a bit first. When plunking down good money for a vehicle, you should get the Carfax AND take it to a mechanic for an evaluation before solidifying the transaction.

Private used car sales are always As Is. That means it's up to the buyer to protect him/herself and to have as much information as possible. It would go double in MI, due to the snow, salt, and potholes. Your cars are rode hard and hung up wet and thus there are more things to be concerned about.

So, get yourself a Carfax now, to see what the story is as far as if the car had been totalled and if it has a salvage title. Take it to a mechanic for a diagnostic, so that you can anticipate any issues. Then take it for state inspection (for no other reason than to assure yourself that the car is good.)

In MA, a buyer has two weeks to have the car state inspected and if it doesn't pass, the buyer can get his/her money back. MI doesn't have this same protection. There is some consumer protection in MI, here is an excerpt from an article:

This does not mean that a merchant or car dealer can defraud a consumer and hide behind an “as-is” sale either. All an “as-is” sale means is the vehicle is sold with all faults and with no warranty of merchantability. If the dealer lied about the year of the car, or rolled the odometer back, or if the car was stolen, the “as-is” sale would not keep you from going after the dealer to take the car back or pay you damages. Unscrupulous dealers will try to sell salvaged vehicles “as-is” without disclosing the salvage history; or, they will mask known problems in the engine through the use of heavy oil and then sell the vehicle “as-is” knowing the engine will explode days after purchase. Again, a buyer could revoke acceptance of these kinds of vehicles because the active misrepresentation or fraud is not waived by the buyer in an “as-is” sale — only the implied warranty of merchantability.

To protect yourself in an “as-is” sale, have the car fully inspected by a mechanic AND negotiate a price that is fair considering the cost of repairs that you may have to make to the car immediately after taking possession.

If you rightfully revoke your acceptance of the product, of whatever kind, the merchant must refund your money to you. If they don’t they are violating the Michigan Consumer Protection Act. The Act specifically prohibits failing to refund the consumer’s money in a transaction that is rightfully canceled or rescinded. If you had returned the item to the seller properly, and they refused to refund your money (or trade-in if you traded a car in on another, for example), you could sue them under this Act and if you won, you would be entitled to a full refund. Further, if you won, the merchant would have to pay your attorney fees and court costs for the action. Even if the cost of the item is small, you’re entitled to a minimum recovery of $250 if you prove that you’ve properly revoked acceptance of the product and the seller refused to give your money back.

Now, if you were buying from a dealer, you would have to sign this disclosure form, affirming that you understood that you were buying a salvage vehicle.

As for dealing with your family member, you don't have a legal leg to stand on, unless he/she committed fraud. If you were lied to about the title or the condition of the car, then you might be able to un-do the deal. But before you wade into that morass, get the car thoroughly checked out.

How much did you pay for the vehicle? What is the Blue Book value of it, versus what you paid? Your relative may have taken advanage of your naïveté in this area.

You need to decide how far you are willing to take this.
posted by Ruthless Bunny at 6:30 AM on December 27, 2013 [1 favorite]

How old is the vehicle? On the page you linked to, it says MI only requires a salvage title if the vehicle is less than 6 years old:

Older-model distressed vehicles are titled as salvage vehicles only on a voluntary basis. Vehicle owners are discouraged from applying for a salvage title on an older-model vehicle because it is not necessary. It is also expensive and often difficult to obtain a vehicle recertification in order to purchase a plate.

Totalled doesn't necessarily mean the vehicle is undriveable or unsafe. It just indicates the insurance company determined it would cost more to professionally fix the car than it was worth based on blue book value. Seemingly minor damage can pass that threshhold pretty easily, especially on an older car.

For example, I once had a car totalled due to minor hail damage because the roof & hood would have had to be replaced to eliminate the dents (even though you could only see them if you looked in the right light). I bought it back from the insurance company and kept driving it for years.

Since it appears MI is not considering the vehicle salvaged, I would ask the relative "Hey, insurance company mentioned this vehicle was totalled at one point, can you tell me what happened?" Assuming they have a reasonable explanation (something not involving major frame damage or flooding), I wouldn't worry about it.
posted by superna at 1:50 PM on December 27, 2013

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