If the car was stolen with a New Jersey title:
**N.J. Stat. § 39:10-32 (2001) **.
a. If a motor vehicle has either been **reported as being stolen **or suffered sufficient damage to render it economically impractical to repair, the person in possession of the certificate of ownership for the vehicle shall surrender the certificate of ownership to the (DMV) along with a statement setting forth how the person acquired the certificate of ownership.
b. The director, after determining ownership, shall issue a salvage certificate of title to a person who surrenders a certificate of ownership pursuant to subsection a. of this section.
English: the owner was supposed to have gotten a salvage title for the car UNLESS it was recovered before he had the chance to do that. If it was settled with an insurance company as a stolen car, they were supposed to have gotten the salvage title.
If the car was stolen with a Pennsylvania title:
75 Pa.C.S. §1164 Section 1164
(A) GENERAL RULE. – UPON PAYMENT TO THE INSURED OF THE REPLACEMENT VALUE FOR A THEFT VEHICLE, THE OWNER OR INSURER SHALL APPLY FOR A **CERTIFICATE OF SALVAGE **BRANDED AS A THEFT VEHICLE.
(B)(2) IF THE COST OF REPAIRS IS LESS THAN THE REPLACEMENT VALUE OF THE VEHICLE, THE OWNER SHALL APPLY FOR A CERTIFICATE OF TITLE BRANDED RECOVERED-THEFT VEHICLE. A LEGIBLE COPY OF THE VEHICLE DAMAGE APPRAISAL REPORT COMPLETED BY AN INSURER OR LICENSED PHYSICAL DAMAGE APPRAISER MUST ACCOMPANY AN APPLICATION UNDER THIS PARAGRAPH. THE DAMAGE APPRAISAL REPORT SHALL INCLUDE THE REPLACEMENT VALUE OF THE VEHICLE.
English: Will have either a salvage title OR a “Recovered Theft” brand on the title.
The title brands serve as disclosures because they will haunt the car for the remainder of its life–any buyer will be able to look at the title and say, “Hm, something’s happened to this car!”. If you are buying the car with an unbranded NJ or PA title, someone is in violation of the state’s titling laws. Technically it’s not your problem if you, a couple years down the road, decide to sell the car and fail to remember to tell the buyer that the car was stolen. How were you supposed to know?
Whether or not I’d buy the car depends on whether or not I plan on selling it later on because the brand will adversely affect the market value of the car (nobody wants a dirty title) and may disqualify the car for trade in at a dealership. If I didn’t care about that, I’d be mighty inclined to get the oil and tranny fluid tested at a lab for obvious tell-tale signs of damage.
ETA: Financing the car may be problematic because a brand, as I said, will adversely affect the collateral’s value. A lot of banks may not touch it. Could always get a personal loan and just use the money for the purchase, however. Insuring the car may be a problem as well depending on your insurer’s practice. Some won’t insure a salvage vehicle, others don’t care.