Although buying a second-hand vehicle is tempting from a financial perspective, it comes with a whole range of risks. A man by the name of Luke Jackson found this out the hard way after he purchased a used 2018 Tesla Model 3 for cash from a dealership in Florida.

While his 9,000-mile Model 3 appeared to be in great condition and came with a clean title, Jackson found out months later that his vehicle had been involved in a serious car accident that resulted in repair bills of $34,000 for severe damage to the front. However, this was not reflected in a salvaged title when he purchased it. Jackson later found out that his Model 3 had been listed on an auto auction website with the accident damage clearly apparent.

According to a report on WSB Radio, previously covered on Channel 2 Action News, Jackson's story isn't the first one of a previously damaged or defective vehicle being sold with a clean title. Allegedly, a Toyota 4Runner with missing side curtain airbags had also fooled several owners. That explains why the Toyota has had seven different owners in five years.

Both the 4Runner and the Model 3 received their clean titles in Texas, and astonishingly, there's nothing illegal about it. Based on Texas law, a vehicle's title remains original unless the repair cost exceeds the car's value. This means that even a massive $31,000 repair bill on a $33,000 vehicle won't be reflected in the title. Many similar vehicles listed for sale in this way were being sold by Progressive Casualty Insurance, but their response was simply that they're in compliance with Texas state law.

For Luke Jackson, what was once his dream car has become a bit of a nightmare. "If I were to resell it, the value would be cut in half probably," he said. "I kind of just lost $20,000." Once Tesla caught wind of Jackson's unfortunate story, the company canceled his warranties and even denied him access to its charging stations.

So, how do you know if your second-hand purchase is a safe bet? Based on recommendations by auto fraud experts, you should get hold of the NMVITIS report or the National Motor Vehicle Title Information System. This report should indicate past accidents not always reflected in a Carfax report.