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The problem of "title washing" - retitling vehicles to remove the red flags or "brands" that indicate the car or truck has been damaged in a collision or a natural disaster - isn't new. For instance, it's possible to move a car that has been totaled - and had that fact marked on the title - into another state and obtain a new, clean title. The vehicle can then be resold or run through an auction, where a car dealer could buy it for sale on the used-car lot.
Compounding the problem is that states don't have uniform definitions of terms used to flag the kind of damage done to vehicles, and they don't have consistent practices when it comes to providing title information to vendors that sell title information to dealers and consumers. The lag time between when a title is recorded or revised and when that information becomes available can be as much as two months.
Insurance companies should be required to make the vehicle-identification numbers of vehicles that are totaled available to the public.
The NADA has tried and failed to get tougher anti-title-washing legislation at the national level. Some state motor vehicle agencies aren't necessarily in favor of giving away valuable data or making investments in data systems to provide real-time access just so a for-profit vendor like CarFax can make more money. The vehicle-repair industry isn't necessarily in favor of titling rules that would make it impossible to resell a rebuilt car.
In the aftermath of the Katrina tragedy, consumers should beware. The NADA, the National Insurance Crime Board and car makers are trying to make it harder for hurricane-damaged vehicles to find their way into consumer's driveways. Car makers are killing the vehicle-identification numbers of vehicles damaged on dealer lots, which should make it impossible to retitle those cars. The NICB has said it is cataloging flood-damaged vehicles to create registry of cars and trucks that shouldn't be resold.
The NADA has posted a 10-point checklist of red flags that can alert consumers that a vehicle could be a flood-damaged car in disguise. Among the clues: rust on screws in the interior; grit or mud under the hood, in the alternator or in other crevices; faded upholstery; and water stains under the carpeting.
Checking a vehicle's title history could turn up that it was recently registered in one of the states hit by the hurricanes, even if the title doesn't explicitly say it was damaged.
NADA Checklist -