Dried Out and Title-Scrubbed, Flooded Cars Lure the Unwary

[cpzilliacus]

N.Y. Times: Dried Out and Title-Scrubbed, Flooded Cars Lure the Unwary

BORDENTOWN, N.J. – At the far end of an enormous hangar, used cars rolled up one by one to the auction block. They had been buffed to a shine, but some carried telltale signs of damage. Puckered leather seats, a hint of mildew, headlights beaded with condensation. Just over two months ago, they had filled with seawater during Hurricane Sandy.

One buyer at the Manheim car auction last Wednesday, Hakim Shittu, kept his hands in his pockets. He was looking for totaled vehicles to export to Nigeria, where they would be fixed up and resold; but these, he said, were too far gone. Saltwater destroys cars, he explained, and even when rebuilt they can be unsafe. "I never buy the flooded ones,"  he said.

[J N Winkler]

The description of "title washing" is interesting.

Recently I have had to deal with the same issue from a different angle.  I have a 1994 Saturn SL2 which was parked outdoors when a major hailstorm came through Wichita in May 2012, destroying roofs, damaging trees, and dimpling cars all over town.  My Saturn came through with only cosmetic damage but the estimated cost of replacing the roof, hood, and trunk lid (all of which are steel rather than plastic and so took dents from the hail) was greater than the blue-book value.  As a result--even though the car never went through a flood--we had to go to the tag office and wait 2 1/2 hours to obtain a post-Katrina salvage title.

[mgk920]

The description of "title washing" is interesting.

Recently I have had to deal with the same issue from a different angle.  I have a 1994 Saturn SL2 which was parked outdoors when a major hailstorm came through Wichita in May 2012, destroying roofs, damaging trees, and dimpling cars all over town.  My Saturn came through with only cosmetic damage but the estimated cost of replacing the roof, hood, and trunk lid (all of which are steel rather than plastic and so took dents from the hail) was greater than the blue-book value.  As a result--even though the car never went through a flood--we had to go to the tag office and wait 2 1/2 hours to obtain a post-Katrina salvage title.

Couldn't you have just replaced those parts anyways, with a likely cost that is well below that of a replacement car, assuming that he rest of it was still in good shape?

I have never understood not fixing a car simply because "it's more than it's worth" when one has no intention of selling the car - especially since the cost of the repairs is often far less than the cost of a replacement car of similar condition and with a similar expected remaining life.



Mike

[J N Winkler]

Couldn't you have just replaced those parts anyways, with a likely cost that is well below that of a replacement car, assuming that he rest of it was still in good shape?

I could have proceeded with the repairs, but ultimately decided not to, for several reasons.

*  I think it is basically uneconomic to make cosmetic repairs on an older car which is stored outside and is unlikely to be garaged in the short to medium term.  The cosmetic issues don't end with the outer body; one A-pillar inside liner is noticeably detached from the headliner, one sunshade has a loose strap as a result of having a garage door opener clipped to it for 15 years, various bits of plastic are noticeably discolored, leather has undergone wrinkling and material loss, etc.

*  The car is somewhat in arrears on maintenance--it needs new spark plugs (the platinum-tipped plugs it has were installed 60,000 miles ago), a transmission fluid change, etc.  All of these items are a higher priority than cosmetic repairs.

*  Fuel economy is lousy.  The car was ordered new with the DOHC inline four, which barely breaks 20 MPG in mixed driving and has never broken 30 MPG in highway driving.  With gas costing around $1/gallon in 1994 these considerations were not so pressing, but in 2013 with gas averaging $3/gallon in winter and $4/gallon in the peak driving season, this car is pretty expensive for long-distance roadtripping.  This is a disadvantage I would like to leave behind if I start racking up a lot of miles annually (which I am not at present--current annual mileage is sub-3,000 on this car but has been over 30,000 on the last car I owned).

I have never understood not fixing a car simply because "it's more than it's worth" when one has no intention of selling the car - especially since the cost of the repairs is often far less than the cost of a replacement car of similar condition and with a similar expected remaining life.

If the powertrain is still in good working order (transmission still shifts smoothly, engine still has adequate compression, etc.), then I agree with that perspective as it relates to mechanical items.  The underlying idea is that by paying for necessary mechanical repairs effectively to "buy back" the car, you get a car whose mechanical history is largely known and do not have to take the risk of getting a lemon if you take the money and spend it on a completely different car of comparable age and mileage.  But, especially for an older car which is fully exposed to UV and temperature extremes, and is not old enough or in good enough condition to qualify as a classic, I don't see that it makes sense to spend money on cosmetics--it is a bit like pouring water into a leaky bucket.

[SP Cook]

In my state, if a car is "totaled" the title must be placed in the name of the insurance company (the state charges no taxes or fees on this transaction).

Obviously, no car, unless it is burnt to a crisp, is ever actually a total loss.  It will have parts that have a value, often quite a number of them, and there is the scrap value of the metal itself, if it comes to that.  Insurance companies can sell the cars (likewise tax and fee free) to liscensed junk yards.  These people are inspected by the DMV, and, when they break the car up for parts, surrender the title to the DMV, at which point the car ceases to exist as a legal thing. 

Or they can sell it to a rebuilder.  A rebuilder is issued a "rebuilder title" which is not valid for obtaining a plate, nor for resale purposes.  The rebuilder must repair the car, keeping all receipts for parts, and then go to the State Police for a 3 day cardboard tag, take the car first to get the regular "inspection sticker" and then make an appointment to meet the state inspector, who makes rounds at DOH garages, who will give the car a complete physical, and inspect the receipts.  Then the rebuilder has to return to the DMV and is issued a "salvage title" that states, as will every title that follows, the the car was rebuilt from a total loss, and the exact nature of the repairs is entered into the state database. 

It is a difficult process which is seriously enforced. 

I know several people who rebuild cars from totals.  They make a marginal living at it, but their main market is towards people who cannot afford better and understand that the car is pretty much unsellable again.