How to Avoid Financing Flood Damaged Cars with Poor Credit Auto Loansby Steve Cypher on Sunday, February 17th, 2013
Knowing that people with credit problems are especially susceptible to buying cars that may have hidden damage, it’s important that they know how to tell if the car they are considering financing falls into this category.
At Auto Credit Express we know that this can happen because we’ve spent the twenty years helping car buyers with less than perfect credit locate those new car dealers that can give them their best opportunities for auto loans.
Car title washing
While high risk car lenders will not finance vehicles with branded titles (which includes those that have sustained water damage), the fact is this doesn’t mean it never happens.
When buyers with poor credit scores end up with loans on cars with water damage, it’s usually the result of “title washing.” This occurs when salvage operators buy flood-damaged vehicles with branded titles, clean them up, and then re-title them in another state where they’re issued a clean title.
American Automobile Association
In a recent article the American Automobile Association (AAA) noted that cars with flood damage often appear on some car lots up to a year after a major flood. Not only that, but these water damaged vehicles can and are shipped and sold as new or used cars anywhere in the U.S.
“Depending on the vehicle make, model and age, the cost of a thorough cleaning and drying may exceed the car’s value,” said John Nielsen, director, AAA Auto Repair. “In many cases, insurance companies ‘total’ flood-damaged vehicles that are then sold to salvage companies.”
“However, rather than being disassembled for parts, some of these vehicles end up being purchased by individuals who bring varying levels of expertise to the restoration process,” continued Nielsen.
Because many areas are difficult to get to (such as door locks, wiring harnesses and heating and air conditioning components) they are not easily cleaned. While these systems might initially perform properly, they could –due to corrosion and oxidation – fail at a later date.
Here are some tips from AAA on how to spot flood damage:
• Obtain a CARFAX Vehicle History Report – One of these can potentially reveal if the vehicle has been involved in a flood, major accident, fire, or uncover odometer fraud.
• Engage your sense of smell to detect any damp or musty odors inside the vehicle.
• Has the carpet or upholstery been replaced or recently shampooed? Pullback the carpet at different areas and look for mud, dirt or signs of water stains.
• Inspect the dashboard underside for signs of mud and dirt. This is a particularly hard area to clean.
• Look under the vehicle for corrosion. It is uncommon to find corrosion in newer vehicles and those that are owned or sold in southern states.
• Open all doors, hood, and trunk to inspect for corrosion, mud and dirt or discoloration on the door frames, hinges and under the weather stripping. Pay special attention to small spaces and crevices that are difficult to clean.
• Check all warning lights, window motors, and all electrical components to ensure they are working properly. While a non-working part alone does not mean the vehicle was flooded, it combined with other difficulties is a cause for concern.
• Always have the vehicle inspected by a quality repair facility prior to purchasing. AAA Approved Auto Repair facilities are located across the United States. Nearby locations can be found at AAA.com/Repair.
As we see it
Consumers, especially those with credit problems, should be especially careful when picking out used cars. While new cars are typically covered by state lemon laws, used cars rarely are. Another thing to remember is that if a deal looks too good to be true, it probably is.
Another thing: if you know your FICO scores are less than perfect we want you to know that Auto Credit Express specializes in helping applicants with car credit issues find dealers that can give them their best chances at approved auto loans.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.