What Is Title Jumping? Everything You Need To Know
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The buying or selling of a car can involve an activity known as title jumping. Sometimes called title skipping or floating, it’s the process of transferring vehicle ownership without official acknowledgment by the seller. In other words, possession goes from the previous owner to a new owner without the intermediary owner/seller being recorded in the paperwork.
We’ll dive into the details of title jumping momentarily, but this is an excellent time to first review the basics of a vehicle title.
What is a Vehicle Title?
A vehicle title—often referred to as a car title or certificate of title—is a document that establishes legal ownership of a motor vehicle. A title is issued by the authorized entity in each respective state, usually the department of motor vehicles (or similar agency). But, a title may not be required for older cars in some jurisdictions.
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What are the Types of Vehicle Titles?
Title types are usually classified as:
Clean: There are no negative indicators that the car is damaged.
Clear: The vehicle is free of loans (no liens).
Salvage: The car has been wrecked or damaged in another way (like due to a flood).
Rebuilt: Indicates that a car with a salvage title has been reconstructed to state standards.
Lemon Law Buyback: A defective vehicle (lemon) purchased back from a customer by the manufacturer.
Keep in mind that these general terms for different forms of titles can vary from state to state.
What Information is on a Title Document?
At the very least, a title certificate will have:
- Vehicle Identification Number (VIN)
- Model Year
- Make
- Date of Issue
- Odometer Reading
- Body Style
- Fuel Type
- Vehicle Weight
- Owner Name
- Owner Address
- Title Number (or some form of control number)
- Lien Information (as applicable)
Some states may link the title with the vehicle’s registration and/or license plate information.
What to Know About Title Jumping
As we mentioned, title jumping is when a seller fails to establish vehicle ownership in their own name and then sells the car to someone else. The title jumps from a previous owner to the new buyer without the seller’s name appearing anywhere. Such an action is illegal in every state and reaches felony status in some jurisdictions. And title jumping can cause problems for previous and new owners.
Why Does Someone Use Title Jumping?
There are many reasons why a private seller or a dealer uses title jumping, and none of them are above board.
Avoid Taxes and Fees: Transferring a vehicle title to a new owner usually involves first paying taxes and fees. So, a private seller who intends to flip a vehicle for a quick sale may not want to undergo this expense.
Reduced Dealer Expenses: Dealers must report every sale, but doing so may mean reaching certain thresholds when additional fees kick in. An unscrupulous used car dealer will try to avoid these extra expenses by never tilting a vehicle in the first place.
Scamming Purposes: Title jumping is one way, in some states, to sell a salvaged car without the title being recorded with a salvaged designation. This may be uncovered when the new buyer goes to title and register the vehicle in their name. And, title jumping enables a seller to keep their name off a transaction; the perfect opportunity to take advantage of an unwitting buyer.
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Title Jumping: Problems for Sellers
Each state mandates how long a new owner has to retitle a vehicle and failing to do so can cause legal trouble. Not only does the state want its taxes and fees, but tracking every owner ensures full disclosure for all buyers.
And without a title transfer, a previous owner may be on the hook for any tickets that occur under the new owner.
Title Jumping: Problems for Buyers
Buying a car with a jumped title can create a host of headaches, mainly involving problems with titling and registering the vehicle in the new buyer’s name. Think about it for a moment. You’ve purchased the car from an unnamed person or business, but the car’s title is in someone else’s name. It’s an opportunity for all sorts of red flags when the time comes to visit the DMV.
In addition, an unsuspecting buyer may be acquiring a vehicle with a problem history that won’t come to light until after the new title has been issued.
How to Avoid Title Jumping Problems When Buying A Car
The easiest way to escape any title jumping issues is to only buy a car in the seller’s name; this applies to private sellers and dealers.
Before signing any documents or handing over money, ask to inspect the title. In the case of a private seller, ask them to produce identification that matches the vehicle title. With a dealer, the title information should mirror its business license or dealer permit. If the seller cannot oblige your verification request, just walk away.
You may encounter a situation where a seller acts on behalf of the legal owner, such as an elderly relative. But regardless of the reason, the seller must have the owner’s power of attorney to do so. Otherwise, you could be walking into a nightmare. Verify every bit of information if you’re dealing with a sale like this.
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Importantly, buy a vehicle history report from CARFAX, AutoCheck, or a similar service. It’s available on most vehicles built since 1981 and will show ownership history and other pertinent details. It’s a good way of confirming what the seller is telling you, but remember that a very recent title transfer may not appear in the report.
Lastly, ensure that a private seller actually signs and dates the title so you don’t have to worry about problems later. Some states require signatures to be notarized or done in the presence of a DMV clerk, so check what’s needed beforehand. Most dealerships will handle (for a fee) the titling process, which can ease the paperwork burden. But don’t forget to inspect the existing title before finishing the deal.
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