Need a used car? Watch out for Katrina-damaged vehicles
NEW YORK — Upward of half a million cars and trucks were damaged when Katrina and other hurricanes hit the Gulf Coast and Florida last year — and many have been fixed up and put onto used car lots or for sale on the street. If you’re in the market for a used car, shopping carefully will help you avoid ending up with a water-damaged vehicle.
Sales of salvaged vehicles to unsuspecting buyers is nothing new. Dishonest and unscrupulous dealers — as well as individuals — have profited for years by taking cars damaged in accidents, doing cosmetic repairs and getting fresh titles, and selling them to unsuspecting buyers. The vehicles may not be safe, or they may require extensive and expensive mechanical repairs.
Water-damaged vehicles are especially dangerous because there can be hidden damage to electrical systems, and the potential for buyers getting scammed is greater now than in recent times.
“The sheer number of damaged cars out there means that people need to be extra careful,” said Jeanne M. Salvatore, vice president for consumer affairs with the Insurance Information Institute in New York.
One of the best ways to avoid getting stuck with a storm-damaged car is to shop at a reputable dealer, Salvatore said.
“They want to stay in business and they don’t want to get in trouble with the authorities,” she said.
It also helps to have a used car checked out by a mechanic before you buy, she added. “A professional can often detect things that the average person would miss,” Salvatore said.
Consumers have a new research tool when it comes to checking out cars for possible storm damage.
The National Insurance Crime Bureau, a Des Plaines, Ill.-based company that investigates insurance fraud, has created a database on its Web site at www.nicb.org where consumers can plug in the vehicle identification number, or VIN, from a car or truck they’re considering to determine if it was reported as damaged in hurricanes Katrina, Rita or Wilma.
VINs can be found on dashboards, driver’s side door-jam stickers and title documents.
Frank G. Scafidi, spokesman for the NICB, said the database currently includes more than 200,000 vehicles and boats, which are identified by hull identification numbers, of HINs. The information was collected from insurance companies, salvage yards and state and local agencies.
“We know there are significantly more out there,” Scafidi said. “But we couldn’t get information on some of the vehicles before they just disappeared.”
Scafidi noted that just checking the NICB database isn’t sufficient protection for used car buyers.
That’s because car owners with little or no insurance coverage likely didn’t report damage to insurance companies or authorities, he said.
Carefully checking a vehicle’s title doesn’t always provide protection either, Scafidi said. New cars that hadn’t yet left docks or dealer lots may never have been titled before they were water-logged, he said. And dishonest dealers have been known to obtain titles for damaged cars that don’t disclose the problems, a practice known as “title washing,” he added.
What makes a sale fraudulent is the seller’s failure to disclose any flood damage, Scafidi said.
“If a consumer or dealer buys a vehicle knowing it’s been in water, fine,” he said. “It could be a hobbyist, or a guy who likes to rebuild and sell cars for profit.”