What is a “rebuilt wreck”

 “No way!” you exclaim as the dealer tells you the price of the lightly used Infinity that looks like it just rolled out of the factory. “Thats right!” he replies, almost as elated as you are.  You get excited about the prospect of getting this great deal  and you impulsively decide to buy it. How can you refuse? Everyone loves a great deal and you can’t bare the thought of someone else getting this deal…There might be a reason behind this great deal.

 There’s a possibility that you are buying what is called a “rebuilt wreck.”

According to Consumer Reports, approximately one million salvage vehicles return to the roads each year.  There are potential dangers, both physical and financial, involved with buying a “rebuilt wreck.”

A “salvage” is a car that an insurance company has determined is a “total loss.”  A rebuilt wreck is when that salvage car is bought, rebuilt and resold.  The qualifications of a  “salvage” vehicle vary between states and this, as will be mentioned later, is a problem that perpetuates the fraud related to rebuilt wrecks.  In Florida, a car is considered “salvage” if:

• The cost of fixing the car (determined by the insurance company) is 80 percent or more of the value to completely replace it.

In Florida, once a car is determined a “salvage,” the current owner must apply for a salvage title before it’s disposed.  This is the state’s attempt to keep track of the vehicle’s history

This process is extremely important because it allows the state to “brand” the car title so future owners (if there are any) know it’s history.  Some examples of brands that appear on titles are Reconstructed, Recovered Theft or Salvage.

What are the dangers

Just the term rebuilt wreck involuntarily invokes a certain fear in buyers. This car was totaled, smashed up, destroyed to almost nothing and yet here it stands, all patched up and shining like new.  There’s a disconnect about that situation that makes us rightfully wary.

Consumers should always look at a rebuilt car with a critical eye because many times, in order to capitalize on the potential profits, dealers and mechanics take short cuts to save on costs.

Dealers and mechanics attempt to save money by accepting shoddy repair work, covering up water damaged floors with new carpets, or even refusing to replace something as important (and lifesaving) as airbags because realistically, how would the consumer ever really know the difference? They may even rip out the airbag indicator light as a way to cover their tracks. People have died from this practice (see this CBS article http://www.cbsnews.com/news/rebuilt-wrecks-deadly-road-hazard/).

Sometimes, using subpar welding and a mishmash of supplies, mechanics are even able to fuse two halves of two different wrecked cars together, creating a scary Frankenstein vehicle that has not only seemingly indefinite mechanical dysfunctions but that is actually really dangerous because it’s not properly done.

It’s these cost saving techniques that allow the dealers to sell these cars at such low prices. So while the extremely low price tag may be enticing, you will probably end up paying more for the car in the long run because of repairs and maintenance needed to fix the broken product you were, sometimes, unknowingly dealt.

 How do they pull it off?

 A lot of people don’t realize that they are buying a rebuilt wreck either because they are purely uninformed and don’t know to ask the dealer or do a background check on the car (via carfax.com, for example).  But sometimes the title of a rebuilt wreck can be completely clean.  How can this be, if, as we saw earlier, people are required to title their car “salvage” before they get rid of it?

White Washing

Here’s where the difference in state laws comes in.  What in one state is considered “salvage” may not be considered the same thing in a different state.  So, if a dealer buys a car in a Nebraska auction, they may be able to get a clean title from that state and bring it back to Florida, or another state, where the car WOULD be considered  a salvage.  Now the car has no mark or brand on the title to let the future owner know the previous state or history of the car.   This process of clearing the title is called “white washing.”  This whole process, though rather extensive and time consuming, is worth it to the dealers because the price of a clean titled used car is significantly higher than the price of a “rebuilt wreck” or “salvaged” used car.

States realize that differing standards makes it easier for dealers to white wash.  So they have developed a new system, called National Motor Vehicle Title Information System (NMVTIS), that pools information from 39 states (11 more are currently being developed) and allows both consumers and states valuable access to the car’s title history.

Not all dealers are sly enough to whitewash. Sometimes they may lie and say that the car is only “used” even though it clearly states on the title that it’s a salvage.  Usually consumers don’t bother to ask to see the title to verify and sometimes, in cases where they do, the dealer says they can’t find it or they may just refuse to show it to you.

How to spot it

So what can you do to at least know before hand what kind of car you’re buying? Before buying, you should:

• Get a vehicle history report (Carfax, Auto Check.etc BUT BE ADVISED THEY ARE NOT ALWAYS COMPLETE SO DONT RELY ON THEM ONLY)
  • It can take a state up to three months to report a car as “salvage” to such sites.  So, even if the car comes up clean, you should ask where/when the dealer got it.
  • Have a mechanic you know and trust examine the car
    • If the seller refuses to let you do this, interpret that as a red flag
    • If they try to avoid letting you see the title, again, red flag
    • If you see the title is new and completely clean, and it’s from another state, look into it further.
    • Look physically at the car.  Some typical signs the vehicle has had work done are:
      • Paint that chips off or doesn’t match indicates damage repair and poor blending.
      • 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 non-original 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 or in trunk may mean flood damage.
      • Fresh undercoating on wheel wells, chassis, or engine strongly suggests recent structural repairs covered up.
      • 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.
      • Dashboard lights, power windows, and other electronics with intermittent problems could be a sign of flood damage.
      • Dashboard air-bag indicator that doesn’t light up could mean the air bag was replaced improperly–or wasn’t replaced at all–after an accident.
      • Big dents, kinks in structural components, or crimped or crunched fuel lines and pipes underneath are the easiest problems to find because rebuilders assume you won’t be looking there.
      • Uneven surfaces on frame components could be filler, seam sealer, or welding beads.
      • Damaged/gouged nuts and metal on top surface of strut tower (which connects the front wheels to the frame) in engine compartment may mean the frame was realigned.
      • New metal on only one part of the hood apron shows section repair rather than replacement of the entire apron piece.
      • Welding bead anywhere on heavy frame members underneath the engine suggests frame-rail sectioning or sloppy repair of a cutout made in the rail to perform repair work.
      • Inconsistent welds around hood apron, door, door frame, or trunk exemplify a non-factory weld.
      • Frayed safety belts or belt fibers that have melted together because of friction indicate a previous frontal impact above 15 mph.
      • Missing car emblem or name on trunk may mean a non-OEM part was used.

Beware

Yes, discovering that you bought a rebuilt wreck is disappointing news, but there is nothing illegal about selling a rebuilt wreck.  The legalities come in to play when that fact is intentionally hidden from you.  For example, you find on Carfax or Auto Check report that states that the insurance company declared this car a salvage one year ago, but the  physical title is clean.

Links

Here is a link to news story about rebuilt wrecks and their dangers.

http://abcnews.go.com/video/playerIndex?id=8666173

http://www.cbsnews.com/news/rebuilt-wrecks-deadly-road-hazard/