Flood Waters May Be Receding, But Flood-Damaged Car Scams Are On The Rise

September 26, 2011

One scam is on the rise and consumers are wise to be leery of used car deals that sound too good to be true. The old adage of “Buyer, beware” holds doubly true when it comes to the torrent of flood-damaged vehicles that may be hitting the market in your area.

Flooded Car

Flooded Car

Enlarge Photo

Think that you couldn’t be the victim of such a scam because you live thousands of miles away from any hurricane or flood-hit area? Think again, warns the Insurance Information Institute (I.I.I.). While it is not illegal to sell or to buy a flood-damaged vehicle, it is against the law to conceal the fact that the car was damaged by flooding from the buyer.

What often happens is that dealers and salvage operators buy up flood-damaged cars on the cheap, clean them up and then send them to various parts of the country to be re-sold – without telling buyers about the cars’ flood history. This practice, sending the vehicle to multiple states to attempt to destroy any record of its damage, is called “title washing.”

How can consumers protect themselves from buying a flood-damaged vehicle? Here are some quick tips:

Do a quick VINCheck through NICB. According to the National Insurance Crime Bureau (NICB), one of the best ways to guard against buying a flood-damaged vehicle is to learn everything you can about the particular car’s history, including whether it has been declared as salvage by a participating NICB member insurance company. To help consumers, the NICB created VINCheck, a free search of a car’s vehicle identification number (VIN) that can be accessed here.

Buy a CARFAX report. That sweet-sounding deal may be full of water if you wind up buying a flood-damaged car that may have made its way to your part of the country and is being sold by unscrupulous dealers or owners to unsuspecting buyers. With a CARFAX vehicle history report, you’ll know if the car has a flood damage title issued by state DMVs.

Only buy from a reputable dealer. Save yourself potential grief by always buying from a reputable dealer. Any deal that is too good to be true usually isn’t a good deal.

Have a certified mechanic inspect for flood damage. If you are buying from a private seller or decide that maybe you’ll take a chance on an unknown dealer, hire a certified mechanic to inspect the vehicle for flood – and any other damage.

Signs to look out for

While you may think you can tell just by looking at a vehicle whether or not it has been involved in a flood, some signs aren’t all that obvious, while some most assuredly are – if you do a little poking around. Here are some telltale signs that should scream at you to steer clear of this particular “deal.”

-      Musty or moldy smell, or the pervasive scent of Lysol or other strong deodorizer all over the car. This is a tactic used by unscrupulous dealers to cover up a problem with odor.

-      Rust on metal parts, including screws on the console or other areas where water would not normally reached unless the vehicle was submerged.

-      Water-stained upholstery or water damage on door panels and seatbelts.

-      Damp floors and/or carpeting or moisture on the inside of the vehicles’ instrument panel.

-      Mildew, silt or debris in areas where it wouldn’t normally be found, such as in and around the engine compartment, under the carpeting, and in the trunk.

Report fraud

If you have knowledge of a dealer committing fraud by knowingly selling flood damaged vehicles as regular used cars to unsuspecting buyers, report it to the police, your insurance company, or to the NICB at 1-800-TEL-NICB.

 

 

[Insurance Information Institute, NICB]

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