Flood-damaged cars being sold?

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Some 570,000 vehicles were damaged during the two hurricanes. There's a risk that many could be retitled and then resold to unknowing buyers all around the country.

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 -

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Reply to
Steve
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This is the first moment I've realized that the danger extends to new cars too if they're shuffled among ethically challenged dealers. It should have been evident, but somehow it wasn't. I guess my sense of trusteworthiness dates to a gentler time.

Thank you for posting, Steve.

Brent

Reply to
Brent Secombe

The wise thing to do when buying a used car is to have it inspected by a reputable mechanic. But I wonder if a flood damage vehicule shows any signs of it? If it has been well cleaned, is there a way to tell?

Reply to
Bassplayer12

The only time a title is branded is when it is totaled by an insurance company. If the owner does not have comprehensive coverage, as is likely the case with the majority of older vehicles, the owner can simply clean it up and sell it.

mike hunt

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Reply to
Mike Hunter

Hachiroku wrote: snip

Hachi, he may have been thinking of salt water flooding, in which case (I'd think) that a modern car'd be toast.

I do know that a radio dropped into salt water (if it's kept in it) can be saved by copious washing with fresh water...but not otherwise...also the radio must have been turned off before flooding.

Reply to
Gord Beaman

I doubt ant dealership has any need to sell off water damaged new vehicles. Most dealerships carry $500 deductible comprehensive coverage. Insurance companies must pay replacement cost, which means the dealer will receive invoice and earn a profit on any flood damaged vehicles even after the deductible is applied.

mike hunt

Reply to
Mike Hunter

Might be.

If you've been watching the news about the Northeast, we got flooded this weekend. Thankfully, I live on high ground.

Interesting to see what comes up for sale in the next few weeks!

Fzzzzzzzzzt!

Reply to
Hachiroku

Seems kinda surprising that dealers would carry that low a deductible. Trading dollars with insurance companies is generally not a profitable enterprise...

Reply to
Steve

On Mon, 10 Oct 2005 14:29:07 GMT, Hachiroku graced this newsgroup with:

..60days? That's very fair of you but that doesn't mean something related to the car's flooded condition still won't crop up months later. You willing to take the car back a year from now? How about if the car is involved in an accident and the electrical system doesn't function properly (e.g. airbags) because of electrical corrosion or other water related damage?

..I don't know if any insurance company that would total a car and retitle it as salvage for that little water damage. Something ain't right here....

..I do..and if you compare a flood damaged car retitled as salvaged vehicle as no worse than driving in the rain, I think you've already answered my question on where your ethics are. Cars are designed to withstand rain, the exterior components of the vehicle is designed to resist that type of water exposure. The *interior* components, including the engine compartment, are not.

...you're kidding right? PLEASE tell me you're kidding. You're trying to tell me that a car, sitting in standing water over it's roof suffers no more damage that a "bad rain storm"???

..oh.jeez..sorry, I didn't know that the through "going over" included inspecting the rocket panels. Well then! I guess I give it 5 stars! It most definately road worthy if the rocker panels are dry.

all kidding aside..

...I never said ALL used car dealers...Just the ones that try and convince the public that they're getting perfectly safe cars that have been salvaged as being no more damaged than "being driven in a bad rain storm". Automobiles titled as "salvage" are auctioned off for

*parts*. They aren't intended to be resold as used cars. I do commend you that you aren't trying to fool the public into thinking they're *not* getting a flood damaged vehicle. Too many unscrupulous people do. Also, I do admit that not ALL vehicles titled as flood damaged may be damaged at all, but merely grouped in a batch of cars (for example a new car dealers lot that was flooded), that were declared total losses for the sake of time for the insurance company. For example, in New Orleans and in the surrounding area, many dealerships were under (or partically) under water, and insurance companies just didn't have the time to inspect every single car on the dealers lot, so they just declared ALL of the cars totalled when in reality, some of them may have never suffered any damaged at all. THOSE are good deals if you can find them, you just have to be absolutely sure what you're getting.

The important point, IMHO, is that the buyer clearly understands exactly what they're getting (and not getting for that matter), when buying a vehicle that's been titled as a flood damaged vehicle. Remember that any vehicle declared totalled has no manufacturers warranty, even if its 2 days old with zero miles. Also, many problems, especially electrical, can show up many many months later and can have reoccurring problems that can cost the buyer thousands of dollars to fix.

Reply to
nospam

Oh yes! Fzzzzt bigtime...I had a 13 ft speedboat with a 65 HP Merc engine on it, I had mounted the 12V car battery up under the bow (for balance). The boat got swamped in a storm and that 12 volt battery absolutely TRASHED the electronics on the engine, there was an electronic box on it with lots of control circuits potted inside. It had about a dozen metal studs coming out of the potting material and about half of those studs had heavy wire going to them...most of them were burned off flush with the potting stuff, wrecking the unit, I found wire after wire burned off all over the damned motor...took me months getting it repaired and only took about 20 minutes to install a good fuse in the line to prevent a recurrence... :)

Reply to
Gord Beaman

" snipped-for-privacy@nospam.com" wrote: snip

One very important aspect that I haven't seen you mention here is whether the flooding was with salt or fresh water. There's a world of difference in the two...in general I'd tend to agree with Hachi about the damage from fresh water.

In a car's lifetime it's gonna be deluged with thousands of gallons of water from splashing over rain flooded streets,sitting outside in a downpour etc.

BUT you get flooded ONCE with seawater and you're in bigtime trouble, especially the electronics, especially powered up electronics, which lots are permanently in modern cars...

Reply to
Gord Beaman

I've seen cars totalled out with no more than a bent fender, and cars that were both front AND rear ended sent off to the repair shop.

No telling why one adjuster will total a car and another will send it for repair.

We tested all our cars and gave them a good going over. We sold 95% Salvage title cars. We also had about a 60% return customer rate! In the odd case we DID miss something, we took care of it, often LONG after the mandated warranty was up.

I saw the cars when they came in, and you would REALLY be surprised at some of the 'totalled' cars coming through.

And who said anything about water over the roof? We stayed away from those. Like I said, the adjusters...

And who says you can't get a manufacturer's warranty on a Salvage title car? Seen it done many, MANY times.

Reply to
Hachiroku

I'm surprised, Gord; YOU didn't fuse it the FIRST time?

Then again, a lot of us who deal with this stuff daily often get 'complacent' and overlook some things, "Just for a little while", "Only while I test it", or, "I'll get the rest of the parts I need next week".

No, *I* have NEVER done anything like THAT! ;) (um, not with cars I was selling...hey, the 400Watt amp in my Supra has it's own fuse, right?!)

Reply to
Hachiroku

On Mon, 10 Oct 2005 23:00:12 GMT, Hachiroku graced this newsgroup with:

*usually* a car with "no more than a bent fender" has structural damage as well...e.g. bent frame or other structural damage that would cost too much to repair. Of course, like you said, it depends on the adjuster. However, insurance companies like to *not* total a car if they can help it because usually (there's that word again), it's cheaper to repair than to replace.

...see above...

..why would your customers keep returning? Unless you've been in business a LONG time, I can't see why someone would keep coming back on a regular basis (especially 60% of them), to keep buying cars. Average turnover rate is 3-5 years for buyers.

..you were the one stating that flood damaged cars were no worse than a car in heavy rain...now you're putting qualifiers on it.

...I call bullshit on that. NO manufacturer would knowlingly cover a car that's been titled as a salvaged vehicle. Too much liability. References please and I'll be happy to let you serve me up a hot plate of crow.

Reply to
nospam

You know the ropes don't you?... :)

Reply to
Gord Beaman

In most cases, the carswe buy have such minimal structural damage it's not funny. Usually they have one piece that needs pulling, most often the part behind the fender, and sometimes we can even pull it ourselves with a hydraulic (hand operated!) puller. I'm not kidding, in a LOT of the cases the damage is minimal!

Sometimes we send them to the best frame shop in the area, but again, very rare we have to do a lot of pulling.

And some we don't have to pull at all.

Our customers usually trade the car they bought 2-4 years ago and buy a newer model.

I never said they were over the roof. The cars we get aren't very bad at all. Only the one we had to replace the engine, the rest just needed a good cleaning/drying!

Done it MANY, MANY times. Ford, Dhevy and Nissan.

References? I want to leave it alone just in case! ;)

I don't know if it's because we're in pretty good with the local dealers, or what, but if a customer drives in with one of our cars, and it's still technically under warranty, they usually get fixed under the original warranty. I guess that alone says something about our reputation.

Reply to
Hachiroku

17 or 18 years as an Electronic Tech...

A few more as a computer tech (first homemade IBM compatible was on a board and boxes!)

Reply to
Hachiroku

Depends on how old the car is. AAA totaled out our 1980 Datsun (passenger side bashed in, driver side perfect, driveable) in 1990 or so and let us keep it. We sold it to a guy who did his own bodywork and as far as I know it never got switched to a 'salvage' title. We bought a salvage GoldWing which just needed a bit of work. Grandspawn bought a salvage Mustang which broke in half after a few months.

Reply to
The Real Bev

Hey, don't discount the possibility that he didn't know it was not fused by the boat builder when the boat was built. I've caught errors like that on the post-mortem teardown all the time - they simply don't think it will ever fail like that, so they don't do the "What If" stuff.

Or they just figure if you manage to blow it up like that, they get to sell you a whole new controller and it's all good.

Every fuse and fuse holder costs them money to install - and people making things to be mass merchandised want to shave every unneeded dime, nickel and penny they can out of the product. When you take that penny and multiply it by the million units they plan to make, suddenly you are talking serious money.

Hell, on that kind of thing I try to err on the side of caution - if I'm out of Mega 60A fuses I'll use an ATO 30A as a substitute. If it pops, then I'll go get the bigger one.

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Reply to
Bruce L. Bergman

Well, gosh... I suppose that it couldn't ever be influenced by which adjusters were getting under-the- table kick-backs from the repair garage, for a big job..

Or from dishonest policy-holders doing minor staged accidents to cash out the whole car value (plus the whiplash claim...)

Nooo... That would be just tooo, tooooo naughty...

Reply to
Antipodean Bucket Farmer

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