Katrina Cars Still Haunt Market

By Luigi Fraschini

Hurricane Katrina devastated the Gulf Coast and New Orleans seven months ago, but the fury of the storm continues to bedevil car buyers across the country.  Why?  Because vehicles damaged by the hurricane's vicious winds and destructive flood waters continue to land on the used car market, and those who buy a "Katrina car" without being informed of its damage are being duped. 

How big is the problem?  Industry estimates indicate that more than half a million cars were damaged by Hurricanes Katrina, Wilma and Rita as they crashed into Florida, Alabama, Mississippi, Louisiana and Texas. The National Insurance Crime Bureau, which disseminates information regarding insurance fraud, has assembled a database of more than 200,000 vehicles reported storm-damaged by the various insurance companies that covered their losses.  You can tap into that database by learning the Vehicle Identification Number (VIN) for a car or truck you are considering and then searching for it at the NCIB (National Insurance Crime Bureau) Web site.

But while that has the potential to shortstop a lot of potential hurricane-related vehicle fraud, it is only an aid, not a panacea.  The database lists fewer than half the vehicles that are estimated to have been damaged by the unprecedented series of storms.  That means that hundreds of thousands of storm-damaged cars are out there, many of them on the used car market, and there is no simple way to determine if they were damaged.

CarFax, a company that specializes in vehicle histories based primarily on vehicle title information, is a good resource as you research potential used car purchases.  But, depending upon state regulations, vehicle titles may or may not disclose flood or wind damage, especially if the damage was not severe enough for the vehicle to be "totaled."  Additionally, the storms affected many new cars and trucks that had never been titled, which gives unscrupulous sellers an opportunity to refrain from disclosing pre-existing damage.  The illegal practice of "title washing" can also be used by crooked dealers to defraud buyers.  This often involves re-titling a storm-damaged car in a state with relatively weak titling regulations, essentially removing the taint of storm damage with a "clean" title that does not indicate the vehicle's dubious history.  Private-party sales might be even riskier, since vehicles sold by individuals are most frequently sold "as is," leaving buyers little recourse if they discover later that the car had been damaged by one of the storms or its aftermath.

Remember, it is not illegal to sell a storm-damaged vehicle.  It only becomes fraud if the seller does not disclose flood- or other storm-related damage prior to the sale.  In fact, sold to the right person who knows what he or she is getting into, a storm-damaged vehicle can be a good, bargain purchase.  But for those who want to avoid storm-damaged cars, there are some simple things to watch for that can tip you off to a potential problem-car.  Among them are new and/or mismatched upholstery, rust and/or silt in the interior and trunk, and electrical accessories like power windows and windshield wipers that don't operate normally.  If the car has any of these attributes, you are well-advised to shop elsewhere.

Cleveland-based auto journalist Luigi Fraschini has bought several salvage cars, repaired them and driven them himself, but it is not something for everybody.

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