Archive for Wednesday, October 12, 2005

State officials warn about purchasing flood-damaged cars

October 12, 2005

— State officials are warning Kansans to be careful when shopping for used cars, saying that the market may soon be flooded with vehicles damaged by Hurricane Katrina.

"Consumers should do a little extra investigating if deals or prices seem too good to be true," said Sandy Praeger, state insurance commissioner.

¢ Flooded vehicles often end up at auctions.

¢ Flooded cars may have lower asking prices, so be suspicious.

¢ Look at the engine. If there is a high-water mark on the block or radiator, it has been flooded.

¢ Look for rust or corrosion on wires and other components under the hood.

¢ Look at the carpet. If it has been replaced, chances are it was because of flooding.

¢ Look in the trunk. Are the jack and tools rusty? Is the well for the spare tire wet and rusted?

¢ Smell the carpet. If it smells damp and musty, be suspicious.

¢ If you see a "Flooded" title, don't even consider the purchase no matter how good the vehicle may look.

¢ Closely examine titles, which can be altered, falsified or laundered through another state.

¢ Take the car to be examined by a trusted mechanic.

"That could be a warning signal for damaged property. Even when vehicles look clean and to be in good condition, there may in fact be hidden defects that could pose danger to buyers down the road," she said.

Don McNeely, president of the Kansas Automobile Dealers Assn., which represents 260 franchise dealers, said last week that an estimated 200,000 vehicles were destroyed by the hurricane that hit Louisiana, Mississippi and Alabama.

He said some of those vehicles would end up back in the market even though they were declared "totaled" by insurance companies.

"This is a very serious concern," he said.

Insurance companies often purchase totaled vehicles from policyholders and then sell them at auction to be resold for parts, many of which would still be suitable for use in other cars and trucks, Praeger said.

State laws require those who purchase the cars have the titles "branded" to show the vehicles had been damaged by floods or totaled. But sometimes unscrupulous rebuilders will clean up the vehicles and attempt to resell them without taking care of the title, McNeely said.

He said the states hit by Katrina had the weakest "branding" requirements in the nation.

Praeger said the flood-damaged vehicles could pose safety hazards because their computer and electrical systems may malfunction.

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