House bill aims to red-flag totaled and flood-damaged vehicles

With the horror of Katrina behind us and the rebuilding underway, there is another threat remaining from this devastating natural disaster. Hundreds of thousands of cars and trucks that had been submerged under several feet of water have now dried out and are, in many cases, finding their way onto the used car market. For buyers, these cars may seem like any other used car offering once they've been cleaned up, but the threat of future problems is great with a machine that was never intended to be underwater. Many of these vehicles are being offered in faraway states with no seeming connection to the flooding, so unsuspecting customers need to be extra alert to spot possible damage. Because of differing state motor vehicle title laws, these problem cars are even harder to spot.

And that's where the Damaged Vehicle Information Act comes in. According to The Auto Channel, its aim is "to ensure that totaled and flood-damaged vehicles are flagged forever so that consumers and auto retailers can make more informed decisions about the safety and fair market value of used cars." This NADA-supported House bill wouldn't require any additional infrastructure, just a permanent red flag affixed to the vehicle's record. Insurance companies would have to make available information about a totaled vehicle's VIN, the reason for it being written off, mileage when it happened and whether the airbags deployed. A similar Senate bill was also introduced and is working its way through committee. Obviously this isn't just about Katrina cars. Every year as many as five million cars are totaled and many find their way back to dealer lots and showrooms.

[Source: The Auto Channel]