Katrina Cars and Rita Rip-Offs
Unidentified Salvaged Vehicles Are a Hazard on the Secondhand Market
By Don Oldenburg
Washington Post Staff Writer
Sunday, March 26, 2006; F05
The "gallon" in "miles per gallon" refers
to gasoline -- everyone knows that. But for tens of thousands of vehicles
flooding the used-car market nationwide, it may as well stand for H2O.
Dirty water.
Think of these storm-fouled cars and trucks as the leftovers of the devastation
from the Gulf Coast hurricanes of 2005 washing ashore -- sometimes as fraudulent
used-car sales on Web sites, or at auto auctions, used-car lots and shady
roadside sales (and I do mean shady).
Insurance companies have designated most of the 600,000 flood-damaged cars
in the wake of the gulf hurricanes of 2005 as total losses. Those bashed
beyond repair end up as crushed scrap metal at a salvage yard. But after
such soggy disasters, lots of wrecks get spiffed up and steered back into
the commercial used-car market. Usually they're for sale in states other
than where they took the swim, states where their titles don't always identify
them as flood vehicles.
"Every time there's a major storm with a lot of water damage, there is
always a problem with unscrupulous car dealers who buy flood-damaged cars and
try to sell them as normal used cars," says Jeanne M. Salvatore, spokeswoman
for the Insurance Information Institute, a nonprofit public-education group
financed by the insurance industry. "But those hurricanes were a huge
disaster last year, and there was a lot of flooding."
Meaning many more flood cars than usual that have been dried out and shipped
across state lines for sale to unwitting consumers.
Want to test the waters? Don't be surprised if you look over a list of flood-damaged
automobiles honestly marked as such and start thinking about the possibilities.
Hey, nice Porsche! How cheap is it? How hard could it be to fix that up --
just for myself? How much could I make if I resold it?
Go ahead. Check out the cars for sale at an online auction such as Insurance
Auto Auctions, a company with live-auction locations nationwide, including
in the Washington area. IAA is putting hundreds of Gulf Coast flood cars
on the block several times a week -- directly from Jackson, Miss., and Baton
Rouge, La. All are apparently tagged flood cars. Some are shipped to auctions
in other states. Many are sold for parts -- but not all.
Wednesday's Jackson auction lists 359 flood cars, and Friday's Baton Rouge
sale lists 241.
Ebay Motors listed 20 flood cars this week. One was a 1996 red Corvette convertible
the seller says was flooded up to the dashboard during Katrina. Even with
a Louisiana flood-salvage title, that baby attracted 15 bids and $5,600 the
day before the auction was scheduled to end.
But cars clearly identified as flood cars aren't the consumer problem. "From
a safety standpoint, buying a flood-damaged car isn't a good idea
for most consumers," says Salvatore. "But it's not necessarily
illegal to buy or sell flood-damaged cars." What is illegal is not pointing
out that a car has suffered water damage.
