Released: December 19, 2006

Beware Katrina salvage cars with ‘washed’ titles

Source: Peter Valdes-Dapena, CNNMoney.com

When a vehicle suffers significant damage, a state Department of Motor Vehicles will usually “brand” its title with a word like “Totaled,” “Flood,” or “Salvage.” Most car buyers would steer clear of such markings. And those interested in such cars would expect a huge discount.

Surprisingly, however, it’s not that hard to clean up a tarnished title. An unscrupulous seller can take a car to a state with less strict rules and get it re-titled. When the car is sold, the title will say nothing about any damage.

A recent study looking at cars that had their titles branded because of flood damage from Hurricane Katrina found that when those cars were re-titled in other states, they got clean titles in 45 percent of cases.

The study was done by Experian, a company that provides vehicle history data for used car buyers, and Carmax, a national used-car retailing chain.

That’s a total of about 7,000 vehicles out of the more than 200,000 that were branded “Salvage” or “Flooded” after Katrina, according to the percentages in the study. (Most “Katrina cars” were never re-titled anywhere else.)

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