Examine Used Cars for Flood Damage

CarFax announced recently that GE Fleet Services will help the company identify vehicles destroyed by floodwaters following Hurricane Katrina. GE Fleet Services will provide a list of vehicle identification numbers (VINs) for GE-managed fleet vehicles, such as company-leased cars, damaged in storm-ravaged areas of the Gulf states.

Before Hurricane Katrina, used-car inventories were high due to the unprecedented employee-pricing promotions on new cars, Fortson said. This meant used-car prices were advantageous for buyers. According to CNW Marketing Research, the average price of a used car sold by franchised new-car dealers dropped to $10,339 last month, the third straight month of declining prices.

Before you purchase a pre-owned vehicle, especially within the next few months, take these precautions:

· Be sure to check the history of the vehicle. If you have to pay for a report, do it. With that history in hand, you may find out such things as whether the car was in a flood or sustained major damage in an accident. You can check for odometer fraud. CarFax has histories on nearly all cars titled since 1981.

However, don't think that just because you get a history report and nothing shows up, you're all clear. For instance, Fortson said he pulled a history report for a pickup truck being sold by a police officer in the Atlanta area and found nothing to indicate the car was damaged. However, after taking the truck to a certified mechanic, he discovered it had been in both front-end and rear-end collisions.

Some con artists engage in "title washing," said Basso of CarFax. This can happen because not every state requires a title to specifically state that a vehicle has sustained flood damage. So sellers will take a car to a state that doesn't require such a label and remove the reference from the title. "Scam artists take advantage of these loopholes," Basso said.

· As a second line of defense, have a trained, certified mechanic inspect the vehicle. And your cousin Bud, who likes to fool around with cars on the weekend, doesn't count unless he's a certified mechanic.

"Bud may not know what he's looking for," Fortson said.

The cost to have a vehicle inspected is about $100. "This is worth the expense on the front end so you can avoid headaches on the back end," he said.

· Take the car for a test drive. Drive it on the highway so you can see how it reacts at high speeds. Drive it in stop-and-go traffic.

· Check for water damage yourself. For example, if a car has a sunroof, look for a water ring around the opening. Pay particular attention if the carpet has been shampooed. If you notice an abnormal odor, this may be a sign of flood damage. If you smell mold, hit the road and don't look back. Look for rusty bolts and screws.

When it comes to a used car, don't be penny-wise and pound-foolish. Spend the money to have the vehicles checked out.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail:singletarym@washpost.com.

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