OT - Buying An Used Car...With The H2O Option Included Free Of Charge
Too_Many_Tools
just cars.
I have also seen several used machine tools that had water and sand
inside them since Katrina...and they were being sold in a different
state than where the flood damage occurred.
TMT
http://www.usatoday.com/money/autos/2007-08-20-flooded-cars_N.htm?csp=1
Flooded cars go to market with little to stop them
By Chris Woodyard, USA TODAY
The Chevrolet Cavalier that Erik Leiken discovered on the Internet
lacked curb appeal. Though only 5 years old, the car, with patches of
primer paint, appeared to have had a hard existence.
Still, the odometer showed only 70,000 miles. And the car was a
private-party bargain at $2,400, far below what he figured a dealer
would charge.
But by the time the Chevy broke down a second time in San Diego
freeway traffic, Leiken concluded that he had bought a clunker damaged
in Hurricane Katrina.
"I should have had alarm bells going off," says Leiken, 21, who says
his suspicion was confirmed by mechanics who found telltale rust, salt
and water damage in the engine and residual moisture in the trunk. A
Carfax vehicle-history report proved the car was in Louisiana when the
hurricane struck.
As the second anniversary of the storm approaches, relatively little
has been done to protect consumers from the estimated thousands of
flooded cars and trucks from Katrina that eluded scrappers. And that's
to say nothing of the cars and trucks that will become flotsam in
hurricanes yet to come.
Here's why:
·A crazy quilt of state vehicle laws allows unscrupulous sellers to
"wash" flood designations from vehicle titles by registering them in
states that don't recognize water damage as trouble.
·The federal government has yet to fully implement a 15-year-old law
creating a national database of vehicle histories. Many states still
aren't participating.
·Legislation languishes in Congress aimed at forcing insurance
companies to share vehicle loss data, including flood damage, with
online auto history companies such as Carfax and Experian.
The insurance industry has its own computer system listing loss data,
but it's not shared with outsiders. Critics say wider distribution of
the database could help reduce the number of flood-damaged cars making
their way to sales lots.
"There is evidence these cars are being cleaned up and sold to
unsuspecting consumers," Sen. Trent Lott, R-Miss., said in a statement
earlier this year. "A number of these cars are unsafe and shouldn't be
on the roads. And folks are overpaying for vehicles they believe are
mechanically sound."
Louisiana officials estimate that 350,000 to 400,000 cars were lost to
Hurricanes Katrina and Rita in August and September 2005. Mississippi
had at least 60,000.
The vast majority were scrapped. About 200,000 cars were branded on
their permanent paperwork as having received some sort of damage in
the storm. But at least 15,000 of those were registered in another
state anyway, Experian reports.
And nearly 45% of those managed to lose their storm-damaged
designation in the process.
In effect, their titles were washed, re-registered in a way that
erases any mention of them being flood-damaged.
Damages can be hidden
Flood-damaged cars are considered time bombs, slowly being eaten away
as salt corrodes onboard computers and other vital components.
Outside, they can be cleaned up and look good as new on a sales lot.
"These cars were immersed in salt water for two or three weeks. ... They
were in bad, bad shape because of the salt," says Rodley Henry, a
deputy director for Louisiana's attorney general.
And buyers often don't find out until it's too late.
Buyers like Marc and Megan Johnson. The 2005 Pontiac Grand Am they
bought from a Chicago-area dealer started to stall in traffic. When
they took the $13,000 car to a mechanic, an unusual stink under the
hood signaled flood damage. Their attorney, William Huttel, says the
paper trail leads back to Louisiana, where the car was registered at
the time of Katrina. The couple are awaiting an arbitration proceeding
against the dealer.
Flooded-car nightmares are not new. Darr Shelton, a retiree now living
in Sun City, Ariz., didn't know the 1969 Lincoln he bought as a
collector car about a decade ago had gone through a flood until he hit
a bump in the road and "sandy mud" appeared in the cabin.
The more you hosed it out, the more sand you got," says Shelton,
adding that the car started having other problems as well. He had it
repaired but, "I didn't feel safe in it anymore." He sold it to buyer
who, despite being told its problems, wanted to fix it up and display
it at classic car shows.
Then, as now, consumers have few protections to ensure they are not
buying flood-damaged cars, because of wildly divergent state laws.
A car denoted on its title as having been flooded in one state may not
be recognized as flooded in another. States even differ on the extent
of damage to a car that constitutes a total loss from flooding.
A survey last year by the American Association of Motor Vehicle
Administrators found 13 states that didn't specifically mention
flooding as a separate category in explaining why a car might have
been classified as salvaged or rebuilt. They were Alaska, Arkansas,
Colorado, Hawaii, Idaho, Kansas, Massachusetts, Missouri, Nebraska,
New York, North Dakota and Vermont. South Dakota didn't have its own
flooding designation either, but it carries one over if it comes from
another state.
Titles can be washed clean
A recent criminal case shows how title washing works.
In June, auto dealer Kenneth Wayne Elliott pleaded guilty in federal
court to conspiring to transport flood-damaged cars with false titles
across state lines. Elliott was the last of three indicted in the
fraud case for failing to tell the Arkansas motor vehicle department
in 1998 that 55 cars they bought in from Louisiana had been flood-
damaged.
With new Arkansas titles that made no mention of the flood damage,
some of the cars were taken to Elliott's sales lot, Jackie's Auto
Sales in Reeds Spring, Mo., to be sold. Others were sold at auction.
Elliott received a year of home detention and $300,000 fine under a
plea-bargain arrangement.
Opportunists are "enabled" by insurance companies, which sometimes
aren't clear about which cars declared a loss actually can't be
repaired and are fit only for parts, says Dick Diklich, a retired
instructor in auto technology at Metropolitan Community College-
Longview in Lee's Summit, Mo. He now serves as an expert witness on
vehicle condition and value.
The insurance industry wants dangerous cars off the road, says Bob
Passmore of the Property Casualty Insurers Association of America, an
insurance industry trade group.
After Katrina, insurers cooperated in creating a database that listed
vehicle information numbers, or VINs, of more than 300,000 vehicles
considered total losses. But insurers say some cars declared totaled
can be cleaned up and resold even after a flood.
For instance, a car flooded in fresh water might incur a total-loss
payout by the insurer but be fit for the road after being cleaned up,
Passmore says.
National database lags
One way to protect consumers from damaged cars would be to complete a
federal database tracking every vehicle title history electronically
by VIN. State motor vehicle officials would be able to tap into a
car's history in seconds to see if it had been flooded or declared a
total loss at any time, regardless of whether it had been re-
registered in another state.
But 15 years and $13 million later, 21 states still aren't
participating and others are only contributing batches of information
with no way to tap the system. Only nine states - Washington, Nevada,
Arizona, South Dakota, Indiana, Kentucky, New Hampshire, Florida and
Virginia - are full online participants, the motor vehicle
administrators association reports.
A cost-benefit analysis prepared for the Justice Department in 2001
found that for an initial investment of about $33 million, the Motor
Vehicle Title Information System, as it's called, would yield benefits
up to $11.3 billion a year by reducing vehicle theft and fraud.
Now, after years of languishing, there is renewed attention to get it
working. The reason? Terrorism.
Vehicles were used in the New York World Trade Center bombing in 1993
and the Oklahoma City Murrah federal building bombing in 1995. The FBI
thinks at least one salvaged U.S. vehicle was used in an Iraq bombing.
That has the Justice Department interested in the database as a way to
trace vehicle histories instantly. It "is taking this issue very
seriously," says Rachel Weintraub, a lawyer for the Consumers
Federation of America, who attended a Justice Department strategy
session on the system last month. "It was sort of a sea change" in
attitude about the system, she says.
At present, 60% of all U.S. vehicles are listed on the system.
Officials hope to have 75% within the next six months and say they're
working hard to get them all.
"We are fully committed to reaching nationwide implementation," says
Jim Burch, deputy director for Bureau of Justice Assistance. "This
crime-fighting tool is a major win for consumers and law enforcement
alike."
Legislation not moving
As a stopgap, bills by Lott and Rep. Cliff Stearns, R-Fla., are aimed
at putting more pressure on insurers to share vehicle-loss data. Lott,
who lost a car and house to Katrina, wants to require insurers to
share with online auto-history report services data about vehicles
they declare total losses. Hearings have been held in the House and
Senate, but the bills have yet to pass either side. The insurers would
have to reveal why the car was declared a total loss, such as flood,
accident or other reason. And because the record is electronic, it
would thwart title washers.
Experian supports the measure. Carfax says it is unnecessary because
it would simply duplicate information it already gets from state DMVs.
The property casualty association is opposed.
While everyone searches for an ultimate solution, some consumers
suffer. Leiken, who bought the Chevy, says he managed to get a few
days' use out of the clunker and about 300 miles before he realized it
wasn't worth fixing and donated it to a San Diego charity. He said the
seller told him it had been bought at an auto auction.
"It still bothers me," says Leiken, a student now living in Davis,
Calif.