Nobody Wants a Flood Damaged Vehicle!

Keith Whann
The Car Counselor

Hurricanes Katrina and Rita damaged hundreds of thousands of vehicles in the Southeastern United States. The vehicles damaged included new and used vehicles on dealership lots, as well as cars and trucks owned by individuals and companies. Ideally, when an insurance claim for a total loss is paid, the vehicle’s title will have a brand (a “notation or symbol”) permanently placed on it reflecting the fact the vehicles has been declared salvage. Unfortunately, that often doesn’t happen. In reality, many of these vehicles end up repaired and resold without any type of disclosure. Other vehicles properly titled as salvage in one state may be returned to the road by "washing" the titles or “concealing the vehicle's salvage history” by titling the vehicles in states that do not carry forward title brands from other states. Perhaps the biggest problem is that despite all of the legislative and regulatory changes that have occurred in the motor vehicle industry, there are still no laws in place today to ensure uniformity or the carry forward of title brands.

Over the past two decades, several attempts have been made by industry representatives to work with congress and Federal Regulatory Agencies to improve the disclosure process. All purchasers of motor vehicles, including both dealers and consumers, should have access to accurate information about a vehicle and its history in order to make informed purchase decisions. Despite efforts like the Truth In Mileage Act of 1986, the Anti-Car Theft Act of 1992, the Federal Trade Commission’s Lemon Buyback Project, attempts by Congress to pass Uniform Titling and Salvage Disclosure Legislation and the recent Uniform Titling Project completed by the National Conference of Commissioner’s on Uniform State Laws, we still find ourselves faced with the likelihood that vehicles damaged by hurricanes and flood waters will have insurance claims paid indicating a total loss, yet return to the road without their titles being appropriately branded. Consider the announcement not long ago by one of the largest insurance carriers in the United States that it entered into settlements with eight State Attorneys General acknowledging that it paid claims for vehicles declared total losses, but failed to brand the titles as salvage as required by law.

Given that legislative and regulatory efforts have not yielded a viable solution, the best solution for both dealers and consumers is education. Half the battle in protecting oneself is knowing what to ask and what to look for during the car buying process. Some useful tips for all used car purchasers, dealers and consumers alike, include:

Purchase vehicles only from reputable sources, such as licensed dealers, NAAA auctions, people that you know and online entities that provide protection against you buying a flood-damaged vehicle. You can also talk to the previous owner if the information is available, especially if the present owner is unfamiliar with the vehicle’s history.

Check the vehicle’s title history to determine if the vehicle is an out-of-state vehicle that may have sustained significant damage in the past, ask the seller about the vehicle’s history and ask to see maintenance records. If the seller doesn't have copies of the maintenance records, it may be possible to contact the dealership or repair shop where the majority of repair work was performed.

For water damage, inspect the vehicle for water stains, mildew, sand or silt under the carpets, floor mats, headliner cloth, inside of doors, under seats, in the trunk and behind the dashboard. Mold or mildew will usually cause a musty smell, so the carpets may have been recently cleaned or there may even be newly installed carpets. Also look at the engine compartment for rust, water and grit.

Examine the vehicle using an inspection checklist and take it for a test drive. Look to see if the paint on the outside of the vehicle matches the paint inside the door frame, make sure that the parts of the car line up with each other and that the gaps between the doors and around the hood and trunk are straight and even.

Have a certified mechanic inspect the vehicle prior to purchasing it, including underneath the vehicle for evidence of frame damage.

Often the easiest way to deal with a problem is to avoid having it in the first place, and owning a vehicle with a prior salvage history is no exception. Until next time, this is The Car Counselor. And remember, car buying can be fun and easy!
 
 
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