Huge Spike in Flood- and Salvage-Titled Vehicles Following Hurricane Sandy Prompts Public Education and Consumer Outreach

NEWARK - With a nearly 6,000 percent spike in flood-damaged and salvage vehicle titles processed in the past three months, the New Jersey Motor Vehicle Commission and Division of Consumer Affairs today announced a partnership to educate the public and prevent consumers from unknowingly inheriting the problems of a vehicle damaged by Hurricane Sandy.

The most notable component of the partnership is the creation of an online Vehicle Identification Number (VIN) database that consumers may access 24-7 to verify whether a vehicle was damaged due to flooding or other means. More than 13,000 vehicles, which have been processed by the MVC as either flood- or salvage-titled since October 27, 2012, are posted in an easily searchable database on the Consumer Affairs website ( www.njconsumeraffairs.gov/floodedcars ) by VIN, make, model and year.

MVC and Consumer Affairs officials announced the launch of the new database and discussed how consumers can avoid being defrauded when purchasing a used vehicle, while at a storage lot here operated by Insurance Auto Auctions that contains hundreds of vehicles damaged by Hurricane Sandy,

"With so many vehicles that were damaged by the recent storm potentially being resold in the future, it's important that the public be well-informed about what to look for when shopping," said MVC Chairman and Chief Administrator Raymond P. Martinez. "Having easy access to this information allows buyers to protect themselves against individuals who would try to circumvent the law and not fully disclose the true condition of a vehicle."

It is not illegal to sell a vehicle with either a flood or salvage title, but specific requirements exist to ensure the status of such vehicles is disclosed to potential purchasers.

"Anyone who attempts to hide the fact that a car or truck has a flood-damaged or salvage title from potential buyers is breaking the law," Attorney General Jeffrey S. Chiesa said. "We will go after those who attempt to enrich themselves by defrauding consumers into believing a vehicle is problem free when, in fact, is has a flood-damaged or salvage title."

If a motor vehicle has suffered sufficient damage to render it economically impractical to repair or has been rendered a total loss by an insurer, the person in possession of the certificate of ownership (or "title") for the vehicle is required, by law, to surrender the title to the MVC. The MVC will then issue a salvage title for that vehicle. Salvage vehicles cannot be registered for the purpose of being driven on the public highways of New Jersey except for the purpose of going to and from an inspection appointment at a Motor Vehicle Commission facility. (N.J.A.C. 13:21-22.6.)
It is against the law to sell or transfer ownership of a salvage motor vehicle except as a salvage motor vehicle with a salvage title, unless the vehicle is repaired and inspected by the Motor Vehicle Commission. (N.J.A.C. 13:21-22.5.)
The owner of a vehicle damaged by flood, but not rendered economically impractical to repair or not rendered a total loss by an insurer, must place the phrase "Flood Vehicle" on the title, assignment of certificate of ownership (title), or manufacturer's statement of origin if a new vehicle, directly below the word "Status." All subsequent titles shall be so noted. Vehicles damaged by flood will not be registered unless the application for registration is accompanied by the appropriately noted certificate of ownership. (N.J.A.C. 13:21-5.6, -5.7.)

The new online database of vehicles that have been issued flood and salvage titles since Hurricane Sandy is being provided as a joint effort by the MVC and Division of Consumer Affairs.

"The new flood-damaged vehicle database is a natural extension of what we seek to do at the Division of Consumer Affairs – make information that is important to consumers widely available," said Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs. "The Division and the MVC both want consumers to know the facts about flood-titled and salvage-titled vehicles so they can make an informed buying decision."

Acting Director Kanefsky noted that those advertising used vehicles for sale are obligated under New Jersey law to disclose to potential purchasers that a vehicle has been previously damaged. (N.J.S.A. 13:45A-26A.7)

"In the wake of catastrophic events such as Sandy, IAA plays a vital role in removing storm-damaged vehicles from affected regions in an efficient and responsible way," said Jeanene O'Brien, Vice President of Marketing with Insurance Auto Auctions. "IAA has partnered closely with the State of New Jersey Motor Vehicle Commission to ensure all impacted vehicles are appropriately titled and registered according to the State of New Jersey's law. Additionally, all storm damaged cars sold through IAA are reported to the National Motor Vehicle Titling Information Service (NMVTIS) and to the National Insurance Crime Bureau (NICB) on behalf of our clients."

Before purchasing a used vehicle, consumers are advised to:

Check the vehicle's title history and be wary if the vehicle has been titled multiple times over a short time period;
Obtain a vehicle history report from the dealer, or get one yourself from a reputable source; this will let you know if the car has been damaged in the past; and
Look for an insurance company's name on the title history, and contact the company for vehicle information.
Chief Administrator Martinez noted that consumers should check that a new or used auto dealer is licensed by the MVC as legally required. Consumer Affairs can provide information on any past actions it taken against a dealership and whether consumers have filed complaints about a dealership.

Consumers also should have their trained mechanic perform a pre-purchase inspection of the vehicle. To find an auto mechanic, consumers can contact the New Jersey Gasoline, C-Store and Automotive Association at www.njgca.org .

Among the telltale signs that a vehicle may have sustained flood damage are:

A musty or moldy smell or the strong scent of a deodorizer all over the car;
Rust on metal parts where water would not normally touch;
Water-stained upholstery or water damage on the door panels or seat belts; and
Mildew, silt or debris in areas around the engine compartment, under the carpeting or in the trunk.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

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