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Consumers warned of hurricane-damaged cars

Missourians say they bought cars coming from the Gulf region.
Sunday, January 22, 2006 | 12:00 a.m. CST; updated 2:26 a.m. CDT, Sunday, July 13, 2008

Buyer beware: One effect of last year’s hurricanes is making its way to Missouri, and it’s traveling by car.

Attorney General Jay Nixon said last week that the Consumer Protection Hotline has received calls from car buyers worried that they might have unknowingly purchased used cars from New Orleans and other areas affected by hurricanes.

Although most calls have come from people just wanting to inform the attorney general of their suspicions, two said they would file official complaints saying they were not informed that the cars they bought came from the New Orleans area, said Travis Ford, the state’s consumer education coordinator .

While there are no signs that these cars have flood damage, Nixon’s office said consumers should be aware that the cars are on the market.

“This thing we predicted months ago is potentially starting to happen,” Ford said.

A scammer can do many things to resell a vehicle affected by a hurricane, including falsifying a title or covering up a car’s flood damage, he said.

“There are lots of parts that can be affected and lots of ways a scammer can cover up that damage,” Ford said

Rust damage can be sanded down or painted over, upholstery can be cleaned and shampooed and an engine can be washed or greased, Ford said. But not all damage needs to be covered up, because some is invisible, such as saturation with bacteria-infested water after a car has been submerged in stagnant water. These cars could pose a health risk, Ford said.

“You would not want to own a car that has been in a flood like that,” said John Fangohr, a mechanic at Accurate Automotive in Columbia.

Auto repair specialists from two shops said flood damage to vehicles varies depending on the type and age of the car, the depth of the water and the location of the flood.

Vehicles that were in last year’s hurricanes are at risk for saltwater damage, which causes corrosion and damages electrical connections, said Walt Shoupe, owner of Walt’s Service Inc. and a licensed salvage dealer.

Fred Segarini, owner of Accurate Automotive, said that while it’s impossible to draw one general picture of what specific problems stem from flood damage, some can be worse than others. “I’d be more concerned about the electrical components,” Segarini said.

It’s not just consumers who unwittingly buy cars from hurricane areas. “It’s possible for dealers to be taken by surprise,” Ford said.

Rusty Drewing, used car manager at Joe Machens Ford on West Worley, said his dealership runs a history report on every car purchased. Although it is possible to forge a title, Drewing uses AutoCheck, which runs a car’s history based on its Vehicle Identification Number. It indicates when the car was registered, as well as previous states where it was registered.

Drewing said his customers know the condition of a car before they buy it.

“You have to disclose that kind of stuff,” Drewing said, “You’ve got to protect yourself as a dealer.”

A car with true flood damage will indicate a salvage record and is clearly indicated on AutoCheck, Drewing said.

“This isn’t 100 percent foolproof, but it’s the best thing any dealer’s got,” Drewing said.

Shoupe said he strictly adheres to protocol for reselling a salvaged vehicle. Protocol consists of repairing the car, filling out an affidavit and turning it into the highway patrol, and obtaining a new title from the Missouri Department of Revenue that indicates prior salvage on the vehicle.

“There’s a ton of crooks out there, and some honest folks, too,” Shoupe said.

State Farm Insurance spokesman Fraser Engerman said that, while State Farm adheres to state laws on branding vehicles as salvaged, the company does not refuse or discontinue insurance for a customer who might have unknowingly purchased a flood-damaged vehicle.

“Whether a vehicle is salvaged or not doesn’t affect a customer’s ability to be insured,” Engerman said.

In his consumer advisory, Nixon included a list of suggestions for consumers to be proactive in detecting flood damage in their used cars. The advisory is posted at the attorney general’s Web site, www.ago.mo.gov. Engerman suggested customers also visit the National Insurance Crime Bureau Web site at www.nicb.org, which holds a database of vehicles affected by hurricanes Katrina, Rita and Wilma.

Consumers can call the Consumer Protection Hotline at 800-392-8222 or visit the attorney general’s Web site to file a complaint about a flood-damaged vehicle.

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