The recent events in Colorado remind us that borrowers with poor credit are far more likely to end up picking out a vehicle with water damage for a car loan
What we know

It's an unfortunate fact but consumers with damaged credit are far more likely to find themselves with an auto loan for a vehicle that has been involved in a flood.

This is something we've learned over the past twenty years here at Auto Credit Express where, during that time, we've helped thousands of car buyers with bad credit looking for online auto loans locate those dealers that can offer them their best chances for auto loan approvals.

Title washing

And while the lenders these dealers work with won't finance a car with a branded title – which includes vehicles that have suffered water damage, that doesn't mean this situation never happens to credit-challenged car buyers.

When it does it's usually the result of flood-damaged vehicles being bought by dishonest salvage operators who clean them up and re-title them in another state in something known as “title washing" – a topic addressed by the Insurance Information Institute (I.I.I.):

Finding concealed damage

"Unscrupulous salvage operators and dealers often try to conceal the fact that the vehicles they are selling have been damaged by a natural disaster," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. "It is not illegal to sell or buy a flood-damaged car, however, it is against the law to sell a water-damaged car without letting the buyer know that the car had been damaged by a flood."

The article went on to state that "To avoid inadvertently purchasing a flood-damaged car, it is important that you only buy a used car from a reputable dealer, have a certified mechanic look for flood damage and check the car's VIN number by using a credible industry database."

The I.I.I. also suggests that buyers be on the lookout for the following clues that a vehicle may have suffered water damage:

• Mildew, debris and silt in places where it wouldn't normally be found, such as under the carpeting in the trunk, or around the engine compartment
• Rust on screws and other metal parts
• Water stains or faded upholstery; discoloration of seatbelts and door panels
• Dampness in the floor and carpeting; moisture on the inside of the instrument panel
• A moldy odor or an intense smell of Lysol or deodorizer; this is a tactic frequently used by dealers to cover up an odor problem

If you suspect that someone is committing fraud by knowingly selling flooded cars as regular used cars, contact your insurance company, local law enforcement agency or the NICB at 800-TEL-NICB.


Consumers also have an important resource where they can learn more about the history of a specific car and whether it has been declared a salvage vehicle by a participating NICB member insurance company. It's called VINCheck and it was created by the NICB to provide consumers with a free search tool using a vehicle's VIN (vehicle identification) number. It can be accessed from the NICB home page here: (

The Bottom Line

Borrowers – especially those with problem credit - should be careful when picking out a used car while remembering that if a deal looks too good to be true, it probably is.

One more tip: Auto Credit Express matches these consumers, even those that believe their only option is a BHPH car loan, with dealers that can offer them their best opportunities for approved auto loans.

So if you're ready to establish your car credit, you can begin now by filling out our online auto loan application.