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Cars damaged by the floods in 2012 may become the used-car-buyer’s nightmare of 2013. As a result of the flooding associated with Hurricane Sandy, it is estimated that tens of thousands of vehicles sustained severe water damage. Such water damage can make a vehicle’s electrical system, including airbag sensors, prone to failure. Based on past experiences with flood-damaged vehicles associated with Hurricane Katrina, it is very likely that many states – including Wisconsin – will soon begin to see flood-damaged vehicles enter their used vehicle markets for sale, titling or registration.
The National Motor Vehicle Title Information System (NMVTIS) is designed to protect consumers from concealed vehicle histories, but the system isn’t perfect.
Consumers can check a vehicle’s history through the NMVTIS website (www.vehiclehistory.gov/nmvtis_consumers.html), so do some checking in advance of purchasing a vehicle by getting the vehicle identification number (VIN) and asking to see the title to determine if brands have already been indicated.
• While the NMVTIS Junk, Salvage and Insurance Total Loss (JSI) program was not in place during the Katrina experience, the good news is the JSI program is now in place and insurance companies are required, by federal law, to report to NMVTIS any vehicle that they deemed to be a total loss.
• However, the requirement to report to NMVTIS is on a 30-day cycle. Therefore, it is possible that flood-damaged vehicles may appear for titling or registration, and a NMVTIS check may not show a report by an insurer because it has not yet been reported to NMVTIS.
• If motor vehicle dealers offer a flood-damaged vehicle for sale, it must be clearly labeled as such. Both the used vehicle disclosure label that is placed on the vehicle’s rear side-window and any advertising must state that the vehicle is flood-damaged.
• Private parties also have a requirement under WI state law to disclose branding on a vehicle. It may be more difficult for consumers to get their money back if a private seller did not disclose a brand and they may need to take the seller to court.
• Wisconsin brands flood damaged vehicles when the repairs exceed more than 70% of the vehicle’s fair market value. If the vehicle is less than 7 years old, the vehicle is also branded as salvage. Other states may have different laws regarding vehicle branding.
Be on the lookout for the telltale signs of flood damage when shopping for a used car
Numerous vehicles that were partially or totally immersed by Sandy may soon show up in Wisconsin following insurance settlements with the original owners. Once a vehicle has been cleaned “cosmetically” the flood damage can be almost undetectable. “Vehicles that look clean might not have been checked out professionally for mechanical and electrical performance,” warns Lynne Judd, administrator of the Division of Motor Vehicles. “Hidden damage can cause an owner serious problems weeks or even months later.”
Obvious signs of flood damage include:
• A musty smell—even if the car was cleaned well, the odor will return if the windows are rolled up, and the car is left in the sun for a few hours.
• Water-spotted upholstery.
• Dirty taillights—even a professional cleaner may not remove the taillight lenses and mud will be on the inside.
• Silt around the air filter—remove the filter and tap it lightly to tell.
• Discolored or painted hood insulation. Unless the insulation was replaced, there will be mud caked under it.
• Brittle wiring.
• Rust in unexpected places.
“If there’s any sign of flood damage or if it looks fine but is from one of the states affected by Sandy, it’s important to conduct an independent inspection of the vehicle before buying it,” says Judd. “In fact, it’s a good idea to have any used car checked over.”