Have you ever seen a title the buyer didn't sign? Have you purposely not signed your name to avoid paying taxes? Did the previous owner of your car skip signing the title, or maybe even a few owners ago? The process of knowingly transferring an open title is called title jumping. Many risks are involved for both the buyer and the seller – it’s a bad move all around.
In this article we’ll talk about the open title itself, then delve into the problems one can cause. To learn more about the effects of title jumping from a bird’s eye view, check out this article inspired by movie stunts and The Office (US).
What is an Open Title?
An open title is one which has not been signed or dated by the parties involved in the sale. Usually only the buyer’s information is left out. If nobody signed the title, that’s a different problem altogether, but one you can easily fix.
So What’s the Big Deal?
Leaving a title unsigned sounds innocent enough, but this can cause serious problems, all of which would be amplified if multiple people pass along the same open title.
Open titles hide the truth
When a car title is branded with a status like salvage or flood, nothing changes on the paper title until the next time it’s transferred. That means a seller could pass a salvage vehicle off as clean by way of an open title, and the buyer wouldn’t know until it was too late.
Open titles confuse everyone
In most cases the new owner must process the title before registering the plates. That means any citations from sources like traffic cameras and parking tickets will go to the seller instead of the new owner. Also, unpaid tiling fees and property taxes will accrue – and eventually someone will have to pay them.
Open titles upset the state
If the state realizes they don’t have a complete ownership history, they can assess fines and fees. Legal action is possible as well, since someone has stolen money from the state by dodging taxes. Licensure fees and additional assessments will have been unlawfully avoided as well.
Examples of Open Titles
The names are fake, but the stories are real.
Tom and his taxes
Sometimes a person isn’t ready to pay the taxes and titling fees when they buy a car. Tom says that’s fine by him, so Lesley buys Tom’s car without signing or dating the title. Six years go by before Lesley remembers she never titled the car. She writes last Friday’s date on the title and heads to the DMV.
What’s wrong with that? Lesley is telling the state she just bought that car. The state now thinks Tom still owned it all those years, so according to the state Tom owes 6 years’ worth of personal property taxes and title fees which he never paid and shouldn’t owe. Only the most honest Lesley would agree to pay that, and the real Lesley can’t be bothered. Tom is SOL.
Jerry and the dealership
The Honda S2000 is a venerated sports car for the ages, and Jerry just found a low-mileage unmodified example at his local dealership. After the perfect walk-around and a thrilling test drive, the salesperson tells Jerry the title is open. “Well it’s still in the last person’s name, Jerry. That’s no big deal, it just goes straight to you without all the added hassle! Come on Jerry, you look great in this car!”
What’s wrong with that? The next day Jerry notices that his shiny new S2000 is pouring smoke. He pulls over and finds there’s no oil in the engine – but there are no leaks either, meaning the dealership forgot to add new oil. The engine is toast. Jerry learns that there are laws protecting used car buyers even if no warranty was offered, but since the dealership never titled the Honda in their name, the legal battle becomes difficult after the dealer disappears.
Ron and his truck
Everyone needs a truck now and then, and Ron is no exception. He just bought a used Silverado from a private seller on Craigslist; he paid top dollar for an exceptionally clean example.
What’s wrong with that? Little did he know that Silverado had prior flood damage. The title doesn’t reflect it because the damage happened under the most recent owner; it’s only when Ron registers the truck in his name that the flood branding will appear on the title. Ron has just overpaid by thousands of dollars for a truck with a slew of potential problems ahead.
How to Avoid Open Titles
As a seller, signing the title (and making sure the buyer does too) keeps you off the hook for other people’s actions. As a buyer, not accepting an open title helps protect you from scammers and schemes. Here’s how to do it:
Never buy a vehicle with an open title. Ask the seller for at least one form of ID. Compare that name to the name on the title. If they don’t match, ask why.
Always get a vehicle history report. Run a VIN check to ensure you’re not buying a stolen car, salvage car, or one with an active lien.
Remember, you can always walk away. There’s no reason to risk buying a car with an open title. Another deal will come along soon.
We’re a small but loud group of title specialists dedicated to combating fraud. We offer a quick $10 Vin Check so you can arm yourself with knowledge. This easy check will reveal any red-flag items, like liens or theft reports. Buy one now or bookmark it for later.
Our specialty is title recovery and we’re well-versed in all sorts of title issues. If you encountered a weird situation and need to ask someone about it, or if you have questions about title jumping or any other title topic, have us call you for a no-obligation chat.