A Louisiana lawmaker and former used-car dealer wants to keep off the road the estimated 250,000 vehicles that Hurricanes Katrina and Rita flooded in his state.
So state Rep. M.J. Smiley, R-La., is proposing a law that would create a tough title brand for damaged vehicles.
Under Smiley's bill, Louisiana would issue a "certificate of destruction" for a vehicle an insurer deems a total loss because of a declared state of emergency or natural disaster.
These vehicles could not be retailed, only crushed or sold for scrap. Usable parts could be sold.
Violators would face fines of $500 to $5,000 and jail terms of as much as six months.
"Cars that have been flooded in salt water have corrosion," Smiley told Automotive News. "This is a safety issue. There could be problems with the airbag, antilock braking and electrical systems."
Smiley, who is from St. Amant, La., says his bill seeks to intercept flood vehicles before they can change hands. Current state law is not tough enough, he says. Scam artists could sell flood-damaged vehicles in states that do not include other states' brands on their titles, he argues.
But the bill has a big loophole because it does not cover uninsured vehicles, says Steve DeMedicis, vice president of Auction Insurance Agency. The Birmingham, Ala., company insures auction vehicles and provides vehicle history reports to wholesalers and dealers.
If a vehicle was last titled in a county affected by the recent hurricanes, DeMedicis says, his company includes that information on its vehicle history reports.
"We are telling people this car was from one of those counties," he says. "There is no definitive list of all these flood cars."
Smiley recently retired as a dealer. He says he unwittingly bought several flood vehicles at auctions in the past few years. He returned those vehicles to the auctions when he discovered their damage, he says.
The National Automobile Dealers Association says 21 states brand vehicle titles for flood damage.
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