The National Insurance Crime Bureau has released updated numbers for the used cars damaged by Hurricane Sandy and the statistics demonstrate one thing: be careful buying used cars from New York and New Jersey.
The NICB issued a report that breaks down the damage by state and New York and New Jersey are far away the two states to have the biggest impact from the late October 2012 hurricane:
- New York: 150,000
- New Jersey: 60,000
- Connecticut: 8,000
- Maryland: 5,500
- Massachusetts: 5,000
- Virginia: 4,500
- Ohio: 4,000
- Pennsylvania: 4,000
- Delaware: 2,000
- New Hampshire: 2,000
- North Carolina: 1,500
- District of Columbia: 1,000
- Rhode Island: 1,000
- West Virginia: 1,000
- Maine: 500
- Vermont: 500
As the NICB observed, "It is important to note that these are preliminary figures and may change as additional claims are received and processed. Also, these are insured losses only. There are certainly many uninsured vehicles that were damaged by Sandy and those numbers are not reflected in this information. Moreover, there is no determination as to the extent of damage to these vehicles. They could have sustained minor paint scratches from flying debris, or have been under water for days and rendered total losses."
There are a couple points worth focusing on in that last paragraph: insured losses and extent of damage. Let's look at insured losses first. That refers to money that insurance companies have paid out for covered items. That mostly likely means we're talking about later-model used cars because many owners of older used cars wisely stop carrying collision coverage because of high deductibles and high premiums. That's not just my thinking. The About.com guide to Frugal Living shares the opinion, too.
Insured losses mean there are potentially thousands of used cars out there - not covered by collision insurance - that aren't declared salvage vehicles. That's an important distinction that often gets overlooked. Insurance companies are usually behind declaring that used cars must have a salvage title. Most private sellers are never going to bother with declaring their used cars to be salvage only because that means leaving lots of money on the table in terms of residual value.
So, private owners desperate to remove what they consider basically junk vehicles out of their driveways are going to focus on selling to anybody "dumb enough" to buy one. That includes wholesalers who will pay any car, regardless of condition. That's because they're basically buying used cars with clean titles. After all, if an insurance company is not involved, then there is no salvage title.
Extent of damage is also important to consider. Don't fall for the belief that a vehicle can suffer a little water damage. It's like being a little big pregnant. Water and combustion engines with all of their electrical systems are not designed to interact as demonstrated by cars stalling out on flooded streets (or being flooded by Hurricane Sandy).
Also, vehicle history reports are going to help but only if the owner has taken the vehicle in for repairs. A consumer could take a vehicle in for repair, get the estimate, and never have the work done. That's probably not going to show up on a CarFax or AutoCheck vehicle history report.
The NICB also has this good observation worth sharing: "Consumers should be aware that severely damaged vehicles may appear advertised for sale without any indication that they were at all affected by Sandy. As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster such as Sandy." That reiterates an important point of caveat emptor or buyer beware.
Consumers can download useful checklists and learn more about flood and salvage vehicle scams by visiting the NICB website. Also, NICB's VINCheck allows free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today.
Again, though, it's important to reinforce that the records are only as good as the reports made into the system. You're not going to find information when insurance claims have not been made and reputable repairs have not been made. The lesson to take away is to make sure any vehicle from the 10 states listed at the top of the article are closely inspected before making any purchase decisions.