In our October eNews Katrina update we mentioned the possibility that some of the half million light vehicles damaged by flooding during Katrina and Rita could reenter the used car market with clean titles and no damage disclosure of their unfortunate history. This can happen when unscrupulous dealers clean the vehicles up, get most vehicle systems working (at least temporarily), and then “wash” the vehicle title through another state’s registration system.
A Federal law that would require the title of any vehicle be “branded” when the vehicle sustained a set amount or type of damage has been introduced in Congress many times over the years but never received enough support for passage.
The sheer volume of cars affected by this summer’s hurricanes and the likelihood that thousands of consumers may be defrauded into buying an undisclosed flood car may have produced the necessary support in this session of Congress. Sen. George Allen of Virginia opened Congressional Hearings last week to consider the adoption of Federal “Title Branding” legislation which would mandate that all states permanently “brand” the title of a damaged vehicle and eliminate the possibility of the title being washed clean in another state.
NAFTC eNews will keep you informed of further developments.