"The Junk Yard Con"

Over the past five years, in Minnesota and Wisconsin, there has been a change in the way car titles have been handled that has virtually eliminated the business of "rebuilding" autos. You may wonder why. The following is my understanding of the change and why this has happened.

Years ago, there were three "status" classifications of auto titles, "clear", "junk" and "salvage." The "clear" title has never been in a accident. The "junk" title was reserved for a car that was in an accident and after inspection by an auto adjuster, was totaled, and MUST go to the junkyard and could only be used for parts. The third classification, or "salvage" title is what this post is about.

The "salvage" title is a car that is in an accident but the car is deemed to be able to be repaired and put on the road. Usually, it is necessary for the state in question to "inspect" these cars prior to service. The rules about this "inspection" varied from state to state. Once the car previosly deemed "salvage" was inspected, the title was deemed "cured" and the word "salvage" was removed from the title.

I think you can see where this might cause problems. Let's say the car was a new 1990 car that was in an accident and not the "salvage" word was removed. Now the owner wants to sell that car to an innocent third party buyer. It is represented as a 1990 car and the value of the "Kelley Blue Book" is quoted. However, Kelly Blue Book pricing is NOT applicable to salvage repaired cars. Once a car has been through salvage, the value NEVER can be returned to the Kelley Blue Book numbers.

So---states like Wisconsin have ruled that once a car has been rebuilt, if they were deemed salvage, they will always have the word SALVAGE on the title.

SO--the Days of the Junk Yard Con are over.

O.K. now some of you are wondering--------- wondering whether this applies to real estate as well as cars. I will let YOU make up your mind on that question. However, if a property is worth 1.2 million and party A agrees with party C, a city, that it will be worth 2.0 million, and taxed accordingly forever, is it ever possible for that property to be transferred to an innocent third party purchaser?

Put another way, if three of you agree that the sky is red, if a fourth person says it is blue, does that make the sky red? In the matter of junk titles, the State of Wisconsin thinks not. How about in the case of real estate? I will leave that up to you.

You make the call.