Beware of flooded vehicle scams
September 23, 2021

NASHVILLE – The Tennessee Department of Commerce & Insurance (TDCI) and the Tennessee Motor Vehicle Commission remind car buyers to be alert for flood-damaged vehicles being sold by scammers preying on unsuspecting Volunteer State consumers.

After severe flooding or a natural disaster such as Hurricane Ida, owners of flooded vehicles that may have been declared total losses by insurance companies may be allowed to retain their damaged vehicles. Instead of sending their vehicles to the scrapyard, some dishonest dealers or other individuals will attempt to make a quick buck by selling their flooded vehicles by disguising them as in perfectly good condition. By the time many consumers discover their vehicle’s true history, the seller will be long gone.

“While a disaster like Hurricane Ida will bring out the best in most people, scammers will use a tragedy such as a natural disaster as an opportunity to turn a quick buck,” said Tennessee Motor Vehicle Commission Executive Director Denise Lawrence. “If you’re approached by someone offering a great deal on a vehicle from a state that sustained flooding from Hurricane Ida, I advise consumers to be wary and never accept a deal on its face value alone.”

To help consumers avoid scammers, the National Insurance Crime Bureau (NICB) offers a free, lookup service called VINCheck that allows consumers to check a vehicle for a “red flag” such as theft, accident damage or being written off as a total loss through an insurance company.

Consumers should remember that the Motor Vehicle Anti-Theft Act of 1996 makes a clear distinction between a “freshwater flood” vehicle (which can be rebuilt) and a “saltwater damaged” vehicle (which cannot be rebuilt). Tennessee titling laws, which are administered by the Tennessee Department of Revenue, distinguish between “non-repairable” and “salvage” vehicles by the type and extent of the damage. (The determination about the type and extent of damage is made by the insurance company.)

Keep in mind that there are lawful ways of reselling previously damaged vehicles. “Salvaged vehicles” can be repaired and sold as “rebuilt vehicles” so long as they comply with the applicable laws. The Motor Vehicle Commission requires that licensed dealers provide a disclosure of the vehicle’s history as previously being a “salvaged vehicle” on a Commission approved form.

To assist consumers and help them avoid flooded-vehicle scammers, the Tennessee Motor Vehicle Commission provides the following post-flood consumer guidelines:

• Prior to the sale of a flooded vehicle, any person selling a flooded vehicle is required by law to disclose such history to the purchaser. Further, once titling that vehicle, the purchaser will receive a branded vehicle title indicating the vehicle’s salvage history. Having such a title will substantially impact the value of that vehicle for further resale.
• Anyone attempting to purchase a vehicle in the near future should be on the lookout for indicators of a flooded vehicle. Indicators of a flooded vehicle include a musty smell, damp carpets or mud or silt under the seats or engine.
• Use a reputable title check service such as the National Motor Vehicle Title Information System to check a vehicle’s history. Title check companies are only as good as the information that they collect from other sources. Some of the sources that they collect data from may be delayed in pushing their data to the system.
• A vehicle’s flood history may take up to 30 days or longer to post on traditional consumer reporting sites. As such, the Tennessee Motor Vehicle Commission recommends that individuals purchase motor vehicles from a licensed motor vehicle dealer. To verify that a dealer or individual is currently licensed, consumers should use the Public Search function on TDCI’s website.
• Have a trusted mechanic inspect a vehicle before purchasing it as the vehicle could appear to be in very good shape but have significant electrical and corrosion issues.
• Be aware that there will be many recreational and powersport-type vehicles that have been damaged. Look for the signs of flooding and saltwater damage before purchasing these units, too.
• If you suspect a licensed dealer has sold you a vehicle with a salvage history and failed to disclose it, you may file a complaint here.
• The Commission is not responsible for collecting or enforcing any refunds from unscrupulous sales but may take disciplinary action resulting in potential civil penalties or suspension or revocation of a dealer’s license.

If a consumer feels he or she is the victim of an unfair or deceptive business practice when dealing with an auto dealer or salesperson, consumers can file a complaint online with the Tennessee Motor Vehicle Commission or contact the Commission at (615) 741-2711 or by email at motor.vehicle@tn.gov.