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NEW YORK (CNN/Money) -
It looks like a bargain. A practically new car with very few miles on it for thousands less than its original sticker price.
But there's something hidden in the vehicle's past. Something very, very wet.
Some fresh upholstery and new carpeting could be covering up a brush with a hurricane. When a hurricane like Dennis tears through a huge swath of American real estate, it smashes up a few auto dealerships along the way. In the process, it dumps gallons on a whole lot of cars.
Insurance companies pay for the damage and those cars are usually sold for salvage. At the state department of motor vehicles, the car's paperwork gets a "SALVAGE" stamp, and data on the loss is entered into the state's database.
But when you buy the car, you may not see any of that. In fact, the car's title may not even be from the state where the damage happened. That's one way unscrupulous used car sellers can hide the fact that a car has suffered major damage.
Different states define terms like "Salvage" or "Totaled" differently.
Let's say, for example, one state, defines "totaled" as damage equivalent to or greater than 60 percent of the car's total value. If someone buys a "totaled" car in that state, takes it away on a flat-bed tow truck and registers it in another state where "totaled" is defined as damage equivalent to the car's full retail value....
Hey, it's not totaled there, now is it?
That means that no record of the damage needs to be made on the car's new state records. Some body work or new upholstery could easily cover up obvious signs of damage. Less obvious damage would still be there, though, and could cause you serious problems later.
Water damage from flooding effects just about everything in car. Electrical components are particularly vulnerable to water damage, said Auto appraiser Larry Batton of the Auto Appraisal group in Charlottesville, Va.
So what should you do to avoid getting stuck driving a car that should have been sold for salvage?
First, get a vehicle history report.
Vehicle history reports, like those from Experian Automotive and CarFax won't tell you everything about a car's history -- for example, they won't tell you about minor accidents or even major accidents in some states -- they should tell you if a car has ever been tagged as "salvage" or "flood damaged" in any state.
These companies search an enormous database of DMV records from all 50 states, Washington, D.C., and Canada. They provide potential buyers with a sort of life history of a car, showing where it was registered, to whom, its mileage and other important notes.
Don't leave it at that, though. For one thing, there's always the slight possibility that someone may have moved quickly enough to fix up and sell a car before record of its damage entered vehicle history report companies' databases. If the state the car's registered in doesn't show up in the vehicle history report, that should raise a warning flag, though
Use your eyes or, better yet, hire a professional set of eyes to thoroughly inspect the car.
Actually a nose might be more important. A musty or moldy smell inside the car can be a giveaway that the car has suffered flood damage, said Batton.
Other things to look for include signs that the dashboard has been removed and open drainage holes in the bottom of the vehicle, he said.
This story was originally reported in September, 2004. It has been reviewed and updated.
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