Beware of Flooded or Salvaged Used Cars

Consumers choose to purchase used rather than new vehicles for a variety of reasons, and used car buying is certainly not a new phenomenon. Buying any used vehicle has certain risks, but a flood-damaged car or truck may present additional economic and safety hazards. Not only can flood damage significantly reduce the market value of a vehicle, but it can also lead to unexpected and significant repair costs.

Many newer vehicle models have sensitive electronic wiring and computer components that may be permanently impaired by water damage. Furthermore, the water may damage not only electrical components, but also the structural frame and vehicle interior. Worst of all, the effects of water damage may not appear for months or even years. Aside from the unforeseen financial consequences of such latent damage, the sudden failure of any safety component, such as a vehicle’s brake system, can jeopardize the safety of not only a vehicle’s occupants, but anyone on the roads.

In any given year, thousands of badly damaged vehicles are cleaned, repaired and shipped from state to state. The number of previously damaged vehicles on the used car market often increases following major weather events that cause flooding on a large scale, such as hurricanes, heavy rains, and the spring thaw in areas with heavy snow. For example, it has been estimated that approximately 600,000 cars were submerged in floodwater as a result of the 2005 hurricanes of Katrina, Rita and Wilma, and many of these cars are still being re-sold throughout the country. As the thousands of cars and trucks are shipped from state to state, some sellers may try to hide the vehicles’ tumultuous history. The Attorney General’s Office urges Minnesota consumers and businesses to beware of flood-damaged vehicles and unscrupulous sellers who may try to hide the history of these vehicles.

How Car Titles are Hidden

Fraudsters often use a combination of cheap cosmetic repairs and title “washing” or “laundering” to hide a vehicle’s past. Title laws vary between states, and crooks use this lack of uniformity to their advantage. Some states even lack salvaged vehicle “branding” requirements, which require title notations indicating that a vehicle has been “flood-damaged,” “salvaged,” “rebuilt,” or other similar history. In Minnesota, for example, the registrar of titles must record the term “flood damaged” on the certificate of title for a vehicle for which the application for title and registration indicates that a vehicle has been classified as a total loss due to water or flood damage. Such laws may not be enough, however, to protect consumers from unscrupulous dealers who often move previously totaled cars and trucks through several states until the vehicle obtains a clear or “washed” title. Minnesota titles do not reveal the original owner of a vehicle that has been sold numerous times; it only lists the current owner. Thus, if a flood-damaged car in Louisiana gets run through Kansas before finally being sold in Minnesota, the title will not reveal that the car was originally from Louisiana.

Tips on How to Avoid Flooded Cars

For more information concerning salvaged cars or to file a complaint, contact the Minnesota Attorney General’s Office as follows:

Office of Minnesota Attorney General Lori Swanson
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
(651) 296-3353
1-800-657-3787
TTY: (651) 297-7206
TTY: 1-800-366-4812

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