Beware of Flood Car Scams
Many of us are familiar with the stereotype of the dishonest used car salesman. They take advantage of those who know little about cars and the fact that we have no way of really knowing the history of the car we are purchasing. Websites such as CarFax makes us feel that these practices can be stopped but leave off a lot of information and can often be incomplete allowing used car salesmen to still find victims for their questionable merchandise.
The most recent scam is the reselling of vehicles that were damaged by Hurricane Sandy in New York. Saltwater is corrosive and can leave cars rusting and dangerous to drive. However, even though many of these cars have been deemed a total loss by insurance companies, they are being dried out and resold in other states.
In most states, cars that have been ruined by flooding are required to indicate that on their titles. However, in some states a car can be re-registered for another title without requiring the flood-brand carry-over. This is known as "title washing" and there's no shortage of used car dealers who are eager to load up the damaged vehicles and pack them off to states without the required carry-over, such as Colorado and Vermont.
At one recent auction at Manheim, damaged cars had been dried out and scrubbed clean, but many of them showed tell tale signs of damage. For example, on some, the leather seating was puckered, while others had condensation beading their headlights. While this kept away some buyers, others were unhindered and some of the damaged cars went for more than $5,000.
Certain groups that keep a look-out for these issues say that insurance companies sometimes exacerbate the problem by underplaying the damage to a car at auction. In 2005, the State Farm insurance company reached an agreement with the attorneys general of 49 states and the District of Columbia for failing to properly title their cars. In the agreement, State Farm said the company is complying with all of the laws in each state affected by Hurricane Sandy.
However, once a car has been deemed a total loss, insurance companies hire special firms to collect the damaged vehicle, tow it away, spruce it up, and resell it. One such company, Insurance Auto Auctions, employs people to study weather forecasts and predict where the next disaster will be. Before Hurricane Sandy even hit the shore, Insurance Auto Auctions already had 400 tow trucks dispatched to the area and had leased huge holding facilities nearby. One of these holding facilities was an airport on Long Island where the runways were leased for $2.7 million for the year. After the hurricane, about 18,000 cars have packed the tarmac from end to end.
Now, consumers all over the country are being warned about the vehicles they are buying. Officials have warned used car shoppers in Georgia, North Carolina, and Illinois where the secretary of state's office is scrutinizing new title applications for cars coming in from states affected by the hurricane. In addition to the state issue is the foreign market for these cars, entirely unhindered by U.S. regulations.
We bring suit for auto dealer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars or misrepresenting a car as being in good condition when it is rebuilt wreck or had the odometer rolled back. Super Lawyers has selected our DuPage and Cook County auto-fraud, car dealer fraud and lemon law lawyers as among the top 5% in Illinois. We only collect our fee if we win or settle your case. For a free consultation call us at our toll free number (877) 990-4990 or contact us on the web by clicking here.