Salvage vehicles

Prior accident used vehicles: what you need to know

One of the most serious types of auto fraud is the concealment of a vehicle's prior accident history. A previous wreck will negatively affect a vehicle in three main ways:

  • Diminished value: A vehicle with a prior accident history will almost always be worth less than a clean vehicle. The reason is simple: most people won't buy a vehicle with a prior accident, and they definitely won't pay clean retail price for it. Depending on the circumstances, a prior accident may diminish a vehicle's value by fifty percent.

  • Safety risks: It's very difficult and expensive to repair major collision damage, especially if the accident caused frame or structural problems. Once a car's structure is compromised, it may not be possible to restore its original integrity. This can pose serious safety risks if the vehicle is ever in another accident. The damaged frame will probably not perform as the manufacturer intended it to, which can expose passengers to significant injuries or even death.

  • Branded title: In many circumstances, a prior accident will result in a branded vehicle title. In Minnesota, for example, if an insurance company appears in the chain of title, the title will have a "salvage" stamp on it. A "salvage" stamp will require additional steps, such as an inspection, before a title can be issued. And a branded title will make the vehicle more difficult to sell and will significantly diminish its value.

Because of these issues, the only way to profitably sell a prior accident vehicle is to conceal its wreck history from the buyer. A dealer can buy a rebuilt wreck for less than wholesale price, conceal the accident history, and charge clean retail price for the vehicle. Or the dealer can pay pennies on the dollar for a still-damaged vehicle at a salvage auction, make cosmetic repairs, and sell the vehicle to an unsuspecting buyer as a clean vehicle at full retail price. As long as the dealer is willing to check its conscience at the door, it can increase its profit margin by selling prior accident vehicles.

If you find out that your used vehicle has previously been in an accident, the first thing you should do is get it inspected by a reputable body shop or collision center. If you're in the Twin Cities, I recommend Schoonover Bodyworks. Tell the collision center that you suspect that the vehicle has been in an accident and that you want them to examine it to confirm. If the body shop confirms that the vehicle has been in an accident, ask them whether there is any structural damage or safety concerns. Also ask whether the signs of the accident would have been apparent to a knowledgeable car dealer. And be sure to get an estimate for any recommended repairs.

Then, call or go to the dealer who sold you the car. Tell them about what you've learned and ask whether they knew about the prior accident. Ask them what they will do to fix the situation, but don't commit to anything on the spot.

It's also a good idea to discuss the situation with a lawyer with experience handling auto fraud cases. There's a good chance that you will have legal claims against the selling dealer and those claims may require the dealer to pay your attorney fees. Once you know what your legal options are, you can decide whether it makes sense to try to negotiate a resolution with the dealer or to assert your claims in court.

And if you're in the market for a used car, here are some steps you can take to avoid buying a prior accident vehicle in the first place:

  • Do your homework: buy a CarFax or AutoCheck report for the vehicle. Most prior accidents are noted on these reports, although there is a lag time between the date of the accident and when it shows up on the report. So don't rely exclusively on the CarFax report. You should also ask to see the vehicle's title to make sure it isn't branded. But remember: just because it has a clean title, doesn't mean that there wasn't a prior accident.

  • Ask the dealer: be sure to ask the sales rep about prior accidents. If he tells you that there aren't any, ask him how he knows that. It's also good to have the dealership note the lack of accident history in writing in the purchase papers. Also, be sure to read the paperwork very carefully. Some dealers will slip a disclosure of the prior accident into the fine print.

  • Get an independent inspection: ask to have the vehicle inspected by a mechanic or body shop of your choosing. You will have to pay for this yourself, but it's worth it. Prior accident damage is easy to spot by a trained professional who knows what to look for. An ounce of prevention is worth a pound of cure.

These steps don't guarantee that you won't end up with a rebuilt wreck, but they definitely increase your chances of getting a safe, reliable used vehicle.

What to do if your car has missing airbags

As we discussed in an earlier post, car dealers sometimes sell a formerly wrecked car without disclosing to the buyer that it's been in a serious accident. Maybe the most shocking is where the dealer repairs the car, but doesn't replace the airbags (and of course, doesn't tell the unsuspecting buyer.) In some cases, the airbag compartment has been found filled with packing peanuts or paper towels. Airbags cost $1,000 to $3,000 to replace, and so if the dealer buys the car at auction, fails to make the repair, and doesn't tell anyone, that's $1,000 to $3,000 of pure, dirty profit to them. Here are a few steps you can take to detect whether your airbags are missing:

  • Check the airbag compartment. Is there physical damage to any of the airbag compartments? Tears or scratches in the dashboard could be indicators that the airbags have previously been deployed.

  • Pay attention to the dashboard lights. When you start the car, the airbag light should go on for a few seconds, and then turn off. If they don't turn off, you might have an airbag problem. But also be conscious if they never go on to begin with. This could mean that the indicator light has been covered up or disconnected to hide the fact that the airbag is missing.

  • Take it to a mechanic. If you have some suspicion that the airbag is missing, a good mechanic might be able to tell, at the very least, that the car was in a serious accident. They might also be able to check whether the wiring on the airbag indicator has been tampered with.

  • Order a summary report. You can order a CarFax or AutoCheck report to see if the car has been in an accident. These summary reports are hardly perfect, and often don't show when accident damage has been sustained to a car, but they can be a starting point.

How to know your car is a rebuilt wreck

Shady car dealers like to find ways to sell bad cars for as much money as possible. A really opportunistic dealer may sell a frame-damaged car with shoddy repairs, not disclosing that the car has serious structural issues. Once a car has sustained serious frame damage, it will often never again be safe to drive, unless very careful and expensive repairs are completed. The safety issues involved in rebuilt wrecks can be severe and possibly life-threatening.

Search the history

One of the ways to find out whether a car is a rebuilt wreck is to search its history. Summary history reports like Carfax and AutoCheck may tell part of the story, so they can be a good first place to look. You might also pull a title history on the car, to see if an insurance company ever owned it, or if it ever had a salvage title. You can pull a title history by contacting the state motor vehicles department in every state the car has been titled.

Look for physical warning signs

Here are a few indicators that your shiny car may be a beater underneath:

  • Paint that chips or doesn’t match indicates damage repair and poor blending.

  • Door that doesn’t close correctly could point to a door-frame deformation and poor repair.

  • Hood or trunk that doesn’t close squarely may indicate twisting from side impact.

  • Fresh undercoating on wheel wells, chassis, or engine strongly suggests recent structural repairs covered up.

  • Paint overspray on chrome, trim, or rubber seals around body openings reveals that the adjacent panel was repaired.

  • Misaligned fenders suggest a poor repair job or use of nonoriginal equipment manufacturer (non-OEM) parts.

  • CAPA (Certified Automotive Parts Association) sticker on any part may indicate collision repair.

  • Uneven tread wear reveals wheel misalignment, possibly because of frame damage.

  • Mold or air freshener cover-up suggests water damage from a leak or flood.

  • Silt in trunk may mean flood damage.

Frame damage is not always hard to spot if you know what to look for. You can also tell by taking your car to a reputable body shop, telling them that you suspect there's damage, and seeing what they say.