November 2012 - Beware of Flood Damaged U.S. Vehicles
“The vehicle losses from Sandy…will be in the magnitude of Katrina – possibly many times greater given the population and area covered”
The US National Salvage Vehicle Reporting Program (NSVRP) is warning US regulators and automotive industry members to brace for a huge influx of flood and storm damaged vehicles after Hurricane Sandy tore through the American North East. “The vehicle losses from Sandy…will be in the magnitude of Katrina – possibly many times greater given the population and area covered” cautions the NSVRP. The damage primarily came from massive salt water storm surges and inland flooding in the most densely populated area of the United States.
While most US states have a branding program, not all do. Therefore “title washing”, the removing of a vehicle’s brand by transferring ownership to a jurisdiction without branding, is still possible. Unfortunately it is expected some of the salvaged vehicles from Hurricane Sandy will be repaired and unscrupulous individuals will attempt to “wash” the title to remove the salvage or flood brand. It’s only a matter of time before some of these vehicles begin appearing at auctions.
Further, the NSRVP is reporting self-insured fleets (e.g. rental car fleets) may pose a particular challenge. Because these vehicles are self-insured, any damage, including a total loss, may not show up on a vehicle history report, and the fleet owners may not report their vehicle losses to a state’s department of transport for branding. Identifying these vehicles will be very difficult.
The Ontario Ministry of Transportation’s mandatory branding program specifically addresses the issue of flood damaged vehicles. According to the ministry “the brand of ‘irreparable’ will be applied to all imported branded vehicles previously identified with ‘fire or flood’ damage”. This means vehicles branded as ‘irreparable’:
- cannot be made roadworthy and can never be driven on the road in Ontario
- can only be used for parts or scrap
- have been written-off as a total loss
Further, the MVDA requires all dealers provide full disclosure of a vehicle’s past use, history and condition including:
- if a vehicle has been branded
- if a vehicle “sustained any damage caused by immersion in liquid that has penetrated to the level of at least the interior floorboards”
- if a vehicle has been registered in another jurisdiction, and if so, where
Failure to properly disclose branding or flood damage is a serious breach of the regulations. This makes it vital for dealers to utilize reliable vehicle history reports AND to conduct thorough physical inspections.
The U.S. National Automobile Dealers Association (NADA) provides these tips on how to spot a possible flood vehicle:
- Check the vehicle's title history by VIN through commercially available vehicle history reports.
- Examine the interior and the engine compartment for evidence of water and grit from suspected submersion.
- Check for recently shampooed carpet.
- Look under the floorboard carpet for water residue or stain marks from evaporated water not related to air-conditioning pan leaks.
- Inspect for rusting on the inside of the car and under interior carpeting, and visually inspect all interior upholstery and door panels for any evidence of fading.
- Check under the dashboard for dried mud and residue, and note any evidence of mold or a musty odour in the upholstery, carpet or trunk.
- Check for rust on screws in the console or other areas where water would normally not reach unless submerged.
- Look for mud or grit in alternator crevices, behind wiring harnesses and around the small recesses of starter motors, power steering pumps and relays.
- Complete a detailed inspection of the electrical wiring system looking for rusted components, water residue or suspicious corrosion.
- Inspect the undercarriage of other components for evidence of rust and flaking metal that would not normally be associated with late model vehicles. (nada.org, 2011).
For more information contact:
Manager of Communications and Education