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Flood-Damaged Vehicles: Let Buyer Beware

March 29, 2000|Jeanne Wright

If you're looking for a used car or truck, beware of recent flood-damaged vehicles being sold on the market by unscrupulous individuals who may not be telling the truth.

Whether the vehicles were victims of Hurricane Floyd on the East Coast or flooding in Northern California, some of these water-damaged--and potentially dangerous--cars and trucks are being sold on the used-vehicle market nationwide.

Seventy-five thousand passenger vehicles were flooded last September by Hurricane Floyd in what became North Carolina's worst natural disaster. Fully a third of those vehicles are now showing up for resale across the country, the AAA Carolinas Motor Club says. The problem is serious enough that North Carolina's attorney general has posted on the Internet a listing of water-damaged vehicles titled in that state.

Chances are that some of these vehicles are making their way to Southern California via the interstate used-vehicle market, said Allen Wood, program manager with the Bureau of Automotive Repair of the California Department of Consumer Affairs.

The trafficking in flood-damaged cars and trucks is part of a larger problem that costs motorists an estimated $4 billion a year in fraud associated with the resale of vehicles that have been "totaled" or are lemons, according to the National Assn. of Attorneys General.

The Department of Motor Vehicles estimates that 150,000 salvaged passenger cars and trucks are put back on the road in California every year, Wood says.

To be sure, repairing and then reselling a salvaged vehicle is perfectly legal. But dishonest sellers who fail to disclose the damage or repair the vehicle properly are scamming unwitting buyers.

Motorists who buy such vehicles may actually be paying market value for a car or truck that could have major problems down the road, Wood warns.

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When insurance companies declare that a car or truck damaged in a flood is "totaled," the company pays the owner and turns the vehicle over to a salvage company.

The ruse begins, Wood said, when "someone who goes to a salvage pool . . . buys a car at a very cheap rate--maybe it's a high-dollar SUV--cleans it up, brings it to California and resells it and gets market value. What they are doing is selling a car that is inherently going to have problems."

When water gets into the passenger compartment, it can damage the computer that controls the electronic system for the engine.

"The corrosion could ultimately lead to complete system failures that may not show up for a few months or even a year later," Wood says.

Safety is another issue. A tire that has been submerged in water can sustain rust in its steel cords, eventually leading to a blowout.

Detecting flood damage can be difficult for typical buyers, Wood said, noting that some of the people who engage in the subterfuge of selling flood-damaged cars are "masters of the sleight of hand."

But there are some warning signs that used-vehicle buyers should look for to prevent getting ripped off:

Check for rust, mildew, musty smells, water in the brake lines and electrical problems, Wood advised. Also look for evidence of silt or a water line inside the passenger compartment.

An older vehicle with new upholstery and a title that has changed hands several times in a short period should raise suspicion. Used vehicles priced far below comparable models can also raise a red flag.

Although owners are required to disclose damage upon sale, sometimes they won't show the title up front and buyers don't discover they have bought damaged goods until the paperwork goes through, Wood said.

Some states, including California, require that titles for salvaged cars and trucks be "branded" with the information that the vehicle was once totaled. Since not all states have that requirement, buyers must be cautious.

Ken Zion, an auto-body repair investigator and owner of Automotive Collision Consultants of Long Beach, noted that a vehicle's title and registration may yield other important clues, since the documents show the model year and the year of original sale.

"These numbers should be within one year of each other or the same year," Zion said. A difference of more than one year could indicate a "significant problem with the title."

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Wood said the best way to determine whether a vehicle has sustained flood damaged is to have it examined by a mechanic.

Prospective buyers can also use the vehicle information number, or VIN, to check the history of a car or truck before committing to a purchase. The DMV can trace a vehicle history, although consumers may get faster service by going through a private search company.

Carfax, on the Web at http://www.carfax.com, offers unlimited numbers of VIN-based vehicle history reports for a 60-day period for $19.95. CCC Information Services, at (800) 633-7834 or http://www.vehiclehistory.com, provides individual vehicle histories for $19.95 and will soon be offering five searches for $29.95.

In addition, the North Carolina attorney general's office posts a list of VINs of water-damaged vehicles titled in that state. The Web site is http://www.jus.state.nc.us.

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Jeanne Wright cannot answer mail personally but responds in this column to automotive questions of general interest. Write to Your Wheels, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. E-mail: highway1@latimes.com.

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