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Gas guzzlers, lemons and otherwise subpar vehicles lumber over U.S. roads every day.

Most car insurance companies require wreckers to dispose of vehicles that have been declared totaled. Most state motor vehicle departments dutifully record damaged status on title records, often preventing such vehicles from being resold.

But not every junked vehicle gets taken off the road, according to industry insiders.

A "gray market" exists for vehicles with flood titles or salvage titles. Safety experts warn that cars with salvage titles could easily buckle in crashes if they had been repaired incorrectly. Flood-titled cars could fail or rust quickly, according to consumer advocates. Some buyers and sellers, especially in states with no formal inspection programs, knowingly trade used cars with such titles because they're cheap. Many junked cars make their way onto used-car lots and into classified ads, where they are sold as if nothing bad ever happened to them.

How cars get amnesia

Most of us buy cars only a few times in our lives. So it's easy to remain ignorant about the ways unscrupulous sellers can try to trick us into believing that a formerly junked car is as good as new:

  • Title-washing. Because some states track only certain kinds of damage, an unscrupulous seller can cycle a car through a series of titles to wash away a history of flood damage or salvage status.
  • "Curbstoning." According to federal officials, some car dealers "give" junked or salvaged vehicles to salespeople, who then advertise cut-rate "private party" sales.
  • Clean-titling. As with title-washing, a vehicle that has recently been relocated across state lines might not have a comprehensive title record. Honest sellers might disclose previous damage but are not always obligated to do so. In the worst cases, a stolen car can be assigned a clean title for a new owner by using a forged vehicle identification number, or VIN.

Despite consumer-protection laws, fly-by-night sellers and cash sales can make it hard for buyers to find recourse after a used-car purchase turns out to be a bad deal. Buyers relying on government protection might be disappointed that gray-market dealers often operate one step ahead of state agencies.

Organizations can help you find out

Fortunately for car buyers, technology and the marketplace move more quickly than state laws. Here are some independent title-research companies and consumer-advocacy organizations that can help you learn the real history of a used vehicle:

  • Carfax. One of the best-known names in automotive research uses VINs and public records to maintain comprehensive vehicle profiles.
  • AutoCheck. Operated by Experian, one of the country's largest credit bureaus, AutoCheck matches state records to purchasing histories and service notes.
  • CarChex. A network of mechanics offers affordable, targeted inspections of used vehicles to uncover flood damage, evidence of past accidents and other abuse. You can review a car's previous inspection or request a fresh look at a prospective purchase.
  • National Insurance Crime Bureau. The bureau maintains records of auto thefts and false VINs. Vehicles on the bureau's watch lists also include damaged vehicles stolen from junkyards before they could be destroyed.

Edie Hirtenstein, a former senior product manager for AutoCheck, said it's important of thorough research before buying a used car. "Without purchasing and reviewing a vehicle-history report," Hirtenstein cautioned, "a used-car buyer may unknowingly buy an unsafe vehicle that had been in an accident, possibly rebuilt due to problems or ordered to be scrapped."

Even if a once-damaged car looks good and operates safely, purchasing a vehicle with a flood or salvage title can lead to major problems with state inspectors, law enforcement officers and insurance companies. In many states, the discovery of damage evidence can require you to take your car off the road and pay significant fines. Because no single group or database can access records from all 50 states, most car-buying experts recommend checking with at least two title-search companies.

Protect yourself from the gray market

In addition to checking with two or more title-research companies, automotive industry experts offer these buying tips:

  • Carefully examine classic cars or any vehicles built before 1981. While announcing the results of an auto fraud investigation, Texas state police reminded consumers that consistent VINs didn't become an industry standard until the start of the Reagan administration. Classic-car buyers should look for signs of VIN tampering, such as scrapes around the VIN plate or a VIN that doesn't match up with similar models.
  • Request an in-person, physical inspection of any used vehicle. "Consumers should always inspect and test-drive the vehicle in person if at all possible," said Hirtenstein. "They should also have the vehicle inspected by a licensed mechanic." A physical inspection by someone who specializes in uncovering flood or accident damage can expose problems that standard VIN checks could miss.

If it seems too good to be true, sleep on it. The insurance crime bureau warns consumers that a low price on Craigslist or eBay that comes with a compelling sob story could be the work of a seller involved in curbstoning or title-washing.