• Make sure you know with whom you do business.• Research the vehicle’s history on the Internet. There are several companies that will help you. There may be a small fee, but it’s worth the expense.• Check the vehicle’s history with your insurance agent using the VIN (vehicle identification number).• Don’t buy a vehicle with incomplete or nonexistent DMV paperwork.• Insist the seller gives you receipts for all repairs and parts at the time of the sale.• If you suspect the car may have been salvaged, get the vehicle inspected before you buy it. There are a number of indicators of flood damage that an experienced mechanic will spot during a careful inspection. They include signs of mold in and under carpeted areas, the heavy odor of air fresheners to cover up a moldy smell, silt or mud residue in the trunk, and dashboard lights, power windows and other electronic components with intermittent problems.If customers knowingly purchase a flood-damaged and subsequently salvaged vehicle, there are a number of state-mandated inspections and registration procedures that must be followed. That information may be found on the DMV Internet website at www.dmv.ca.gov. (Look for the “register your vehicle button” on the left-hand side of the web page. More information about salvage vehicle branding is also available on the website.
DMV warns Californians of hurricane salvage fraud
October 14, 2005
Santa Paula News
The California Department of Motor Vehicles is warning customers to be on the lookout for pre-owned vehicles that have been damaged by flooding as the result of Hurricanes Katrina and Rita.
The California Department of Motor Vehicles is warning customers to be on the lookout for pre-owned vehicles that have been damaged by flooding as the result of Hurricanes Katrina and Rita. Some of these vehicles might be offered for sale without proper documentation indicating they have been salvaged, repaired and carry titles that haven’t been properly and legally “branded.”“Just because a vehicle has been salvaged and repaired doesn’t necessarily mean it might not be a decent car or truck,” said DMV Director Joan Borucki. “What we want to alert consumers about is purchasing a salvaged vehicle and not knowing that it’s a salvaged vehicle. Many body shops can work miracles with vehicles that have been ‘totaled’ by insurance companies, and can make them look and run and be as safe as new. But customers need to know that information, and California law mandates that all salvaged vehicles be identified as such.“Unscrupulous auction houses and dealers will try to sell flood-damaged vehicles to unsuspecting buyers, and oftentimes those vehicles haven’t been properly repaired. With recovery efforts now underway in Louisiana, Alabama, Mississippi and Texas, we expect to see those kinds of vehicles showing up in California in the next few weeks,” she said. Based on information received from law enforcement and other government agencies, it is estimated that anywhere from 250,000 to 500,000 vehicles could have been damaged by floodwaters from the recent hurricanes.According to DMV statistics, California has some 2.5 million vehicles registered as “salvaged,” and another 145,000 are added to the registration rolls each year. A “salvaged” vehicle is defined as having been wrecked or damaged in some way, and the owner, insurance company, financial institution or leasing company considers it too expensive to repair.Most often, when an insurance company determines that the vehicle is a “total loss salvage,” it pays the owner the value of the vehicle before it was damaged, and then sends the certificate of ownership, the license plates and a required fee to DMV, which in turn, issues a salvage certificate for the vehicle. If the vehicle is then repaired and re-registered, DMV then “re-titles” the vehicle as “revived salvage” or “salvaged.” This re-titling process is also known as “branding” the vehicle.What often happens after disasters such as Hurricanes Katrina and Rita is that dishonest dealers or auction houses buy up damaged (or in this case flood-damaged) vehicles, have them cosmetically repaired to the point where they can be easily sold to unsuspecting buyers in another part of the country, and then transfer the salvage titles through several states until the “brand” eventually gets left off the ownership documents - often erroneously. (This process is called “washing the title.”) At that point, because the salvage “brand” has disappeared from the title, buyers looking for a deal can get duped.Borucki points out this process often happens with upper-end, luxury cars that are sold at seemingly bargain prices. “And again, consumers lose because they don’t know what they’re paying good money for. Vehicles with ‘washed’ titles may have been repaired with stolen parts, substandard parts or even secondhand parts that can seriously undermine the structural integrity of the vehicle,” she said.DMV suggests that consumers in the market for a pre-owned or used car or truck in the next few months be especially vigilant and consider some simple safeguards:• Watch out for vehicles with registrations from states affected by the recent hurricanes.
