CONSUMER ALERT
MIKE COX
ATTORNEY GENERAL
 

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern.

Used Vehicle Buyers
Watch for Flood Damage
 

Some experts estimate more than 500,000 cars were significantly damaged by Hurricanes Katrina and Rita.  Many vehicles were submerged in salt water or contaminated water for several days in Louisiana.  Insurance companies purchase vehicles from policyholders, declare them totaled, and then sell them at auction to be resold for parts because many parts are still suitable for use in other vehicles.

Some unscrupulous dealers and wholesalers, however, buy flood-damaged cars at scrap prices, clean the vehicles up, re-title them, and sell them.  The vehicles may look good, but their electronics and safety systems are probably damaged and threaten the safety of the new owners. 
 

NATIONAL INSURANCE CRIME BUREAU FREE TOOL
 

A free tool offered by the National Insurance Crime Bureau (NICB) allows consumers to check a vehicle identification number (VIN) to see if the vehicle has been affected by the hurricanes.  NICB is a non-profit group that works with insurers, law enforcement, and the public to fight insurance fraud and vehicle theft.  NICB is supported by the insurance industry.

The new tool is available at www.nicb.org.  NICB continues to compile the registry from information supplied by insurance companies, state and local governments, and salvage yards.

NICB is loading branded title information resulting from Katrina and Rita as soon at the information is received, but NICB acknowledges the registry will never include all the vehicles damaged by Katrina and Rita.  The NICB Web site also lists information about boats damaged in the hurricanes.

If a vehicle is on the list, consumers should avoid buying it.  If a vehicle is not on the list, consumers should still conduct further investigation.
 

Title Companies Offer Free Storm Information TOOLS
 

Carfax allows consumers to check if a vehicle was registered in any of the counties declared a federal emergency disaster area.  Consumers can access the Carfax information at www.carfax.com/flood. 

Experian Automotive is also offering free storm-damage vehicle information to consumers through the AutoCheck Storm Scan feature at www.autocheck.com/storm.  The AutoCheck Storm Scan feature determines whether the vehicle was registered or titled within the last 12 months in Alabama, Louisiana, Mississippi, or Texas.  AutoCheck also provides storm damage as reported by a dealer or company to AutoCheck. 

Both features operate using a VIN search.
 

ADDITIONAL RESEARCH ON TITLE HISTORY
 

In Michigan, clean titles are printed on green paper while titles for salvage vehicles are printed on orange paper.  A Michigan title history can be purchased from the Secretary of State, forms available at www.michigan.gov/sos under the "Featured Services" link.  Consumers can also check a vehicle's title history through a service such as Carfax (www.carfax.com) or Autocheck (www.autocheck.com).
 

CHECK STATE FARM SETTLEMENT SALVAGE INFORMATION
 

Consumers should also check to see if the used vehicle they are considering is one of over 2,500 in Michigan that were issued salvage titles as part of the Attorney General's settlement with State Farm Insurance Company.  For a list of these vehicles, see http://www.mi.gov/ag/0,1607,7-164-17334_17362-128145--,00.html.

You can also, for a fee, research a used vehicle's history through Carfax (www.Carfax.com) or AutoCheck (www.autocheck.com).
 

Tips for Detecting Flood-Damaged Vehicles
 

Because unscrupulous individuals can alter, falsify, or launder a title though another state, consumers should closely examine even vehicles with an apparently clean title for flood damage.

The following tips help consumers protect themselves from purchasing a flood damaged vehicle:

• Check inside the trunk, including around the spare tire, for evidence of moisture, silt, or corrosion.
• Check the engine for signs of moisture damage, such as rust, silt, or grass.
• Give the vehicle a smell test - inside and out - if it smells musty, it could have been flood damaged.
• Examine the underside of the vehicle for signs of excess moisture, including rust and flaking metal not normally associated with late-model vehicles.
• Check inside dome lights, glove boxes, and other places where water might have been trapped for signs of moisture, mold, rust, or silt.
• Check the interior for signs of mismatched items such as carpeting or seat covers.
• Test all electrical components, including lights, signals, switches, and audio system.
   
• Test the air-conditioner and the heater.
   

INSPECTING A USED VEHICLE
 

The most important thing to do before you buy a used vehicle is to take the vehicle to a mechanic you trust.  If the seller will not let you take the vehicle to someone you trust for an inspection before you agree to buy, find another seller.

Before you take the vehicle to a mechanic for a final inspection, conduct your own thorough investigation.  Consumer Reports joined with Carfax to provide buyers with a free Guide to Inspecting a Used Car publication available at: http://www.carfax.com/cfm/CR_article.cfm

FILE A COMPLAINT

Michigan consumers who discover they unknowingly purchased a storm-damaged vehicle should file a complaint with the Attorney General's Consumer Protection Division at:

Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909

517-373-1140
Fax: 517-241-3771

Toll free: 877-765-8388

www.michigan.gov/ag (online complaint form)