Hurricanes, Floods and Used-Car Sales

A vehicle's title documents can include information on natural disaster damage as well as when a vehicle is declared "totaled" after an accident. "All we need is a list of VINs for totaled vehicles, and the insurance companies should provide this," said Kain. In the aftermath of Katrina and Rita, the National Insurance Crime Bureau is collecting the VIN numbers of flood-damaged cars and plans to distribute those numbers to head off the wholesale hoodwinking of the car-buying public.

National Standard
Some vehicles will still get through the system, because it is full of holes. Damaged vehicles can be bought for scrap, taken across state lines, power-washed and buffed then re-titled with a clean bill of health. A national standard for titles and a title history that follows a vehicle through all 50 states could curb the problem. As it is now, states have different laws about how much information a title includes and different language to describe damage. They are not now required to carryover information from a different state. Creating a national database, open to consumers on the Web, would allow a consumer to trace the real history of the vehicle they are considering.

Anyone buying a used car in the next year or so should take steps to ensure they will not become a flood victim.
The dealers association is urging Congress to take action by using incentives to make state vehicle title laws more uniform. Such a law should encourage the states to carry forward titling from other states. "No one should be able to wipe a title clean simply by obtaining a title from another state," Kain said. "The front of each title should carry all the brands of the states where that vehicle has been titled," he added.


The dealer group estimates the number of flood-damaged vehicles resulting from Katrina and Rita at 570,000, and cautions that about half of those vehicles, or 285,000, will be cleaned up and sold in the used car market by shady dealers.

Inspection Tips
A national database is still just an idea. It is waiting to be drafted and passed, funding is still being appropriated, and the DMVs are still being prodded to create state databases. In the meantime, consumers are still at the mercy of the bad guys. Anyone buying a used car in the next year or so should take steps to ensure they will not become a flood victim. While there is no sure way to detect vehicle flood damage, NADA offers 10 inspection tips that may be useful in detecting significant water damage. At a minimum, a prospective buyer should: