Watch Out for Flood-Damaged Used Cars
MADELEINE BRAND, host:
Cars that were partially or totally flooded in the wake of the Gulf Coast hurricanes could end up on the used car market. The online used car market CARFAX estimates that Hurricane Katrina alone caused water damage to more than 250,000 vehicles, and con artists are poised to sell these cars to unsuspecting consumers. So if you don't want to end up buying one of these, we have some advice from our regular personal finance contributor, Michelle Singletary. I spoke with her earlier about the likely victims of these scams.
MICHELLE SINGLETARY (Personal Finance Contributor): Sadly, the people who are going to be taken advantage of are the people who probably live in some of these areas and people who are of low income who are looking for reasonably priced cars. In fact, there was one expert that said many of the people who were displaced in New Orleans and the other Gulf areas probably didn't have a car are now going to need it because they're in areas where they need transportation, and they're going to probably become victims of these really nasty people who are going to be trying to sell them these cars that should not be on the road.
BRAND: So how do they get away with selling these cars, damaged by the floodwaters, without the buyer knowing it?
SINGLETARY: Well, first of all, it is illegal to sell a car and not disclose that it's been damaged by a flood, but it's not illegal to sell a car that's been damaged by flood. You just have to let the buyer know. But, of course, who wants to buy a car that's been flooded and you probably shouldn't. Most experts say that the damage is probably too extensive, and many times, these cars are not going to be safe. And they get away with it because they lie. They're lying dogs and they, you know, I mean...
BRAND: Putting it bluntly, yes.
SINGLETARY: You know me, I'm a blunt kind of woman. You know, they change the titles, or because there's not a consistent policy from state to state. Say, one state may say that the title has to say that this car was damaged by flood, but another state may say that you only need to say that this car was salvaged. So it may not specifically say that it was damaged by a flood, so they move it to another state, change the title, and then sell it to someone who has no idea that this car was flooded.
BRAND: So what can people do to avoid buying such a car?
SINGLETARY: Well, you know, there are a couple steps that you need to take. First of all, check the history of the vehicle. There are a number of organizations that will allow you to check, the history. CARFAX is one of them. And it'll, you know, give you a title search. And it's a good way to find out whether this car came from a state that required the title to say that it was damaged by a flood. It's not foolproof because as I said, people can move cars from state to state or they can change the title illegally. But that's one way.
Your second defense is to get the car checked out. Take it to a mechanic. Now I know lots of people in this position, they're just trying to get into a car and they don't want to spend the money. It costs about a hundred dollars, and I'm telling you, it's well worth it. Whenever you're buying a used car, you need to get it checked by a mechanic, and a mechanic will know what to look for. They'll know to look for water damage around the seals, and if it's a car, say, for example, with--that has a sunroof, they'll be able to see if there's been some water damage around the rim of that window. But it's so important to get the car checked out. So get a history, get the car checked out, and take it for a test drive, and take it on, you know, surface streets. Take it on the highway. If you follow these three steps, you're less likely to get one of these cars that may have been damaged in these two hurricanes that we just recently had.
BRAND: Michelle Singletary, not a lying dog, writes The Color of Money column for The Washington Post. She tells the truth every week. She joins us regularly for conversations about personal finance every Tuesday.
SINGLETARY: You're so welcome.
BRAND: And if you have financial questions for Michelle, please send them by going to npr.org and clicking on the `contact' option and remember to include `Michelle' in the subject line.
DAY TO DAY is a production of NPR News, with contributions from slate.com. I'm Madeleine Brand.