No, Of Course This Car We're Selling Has Never Been In A Severe Accident

Last year, Brandon’s car was destroyed in an accident, and he went shopping for a new-to-him vehicle. He found a nice 2008 Honda Civic at a good price with a clean Carfax report. Sweet deal! Now Brandon’s in the market for a new car. At another dealership, he learned that the Civic isn’t worth as much as he had thought as a trade-in, because the vehicle had sustained severe body damage in an accident, then was rebuilt. How did they know this? The now-updated Carfax report, of course.

Brandon writes:

I have a bit of a dilemma that i’m not too sure how to handle. Almost exactly a year ago, I was in an accident that totaled my car and I was in the market to get another one. After some research I decided to go with a 2008 Honda Civic. Everything was fine, the CarFax the dealer showed was clean and they even knocked a bit off the price for me.

Now coming into the present, I’m in the market for another car. I took the 2008 Honda Civic that I bought as the trade in. The Salesperson at the new dealership (MINI) comes back and states “The CarFax on this car isn’t clean. Its was in a severe accident with severe body damage.” Now I can’t trade this car for what it should be worth. Never was it disclosed that this 2008 Honda Civic had previously been in an accident or even had any kind of bodywork done when I bought this car.

In the state of California are there any laws that are meant to protect me from this? And is there anything that I can do about the original dealership lying to me about the condition of the car?

This is a common problem, and the dealership may or may not have known about the car’s smashed-up past. Cars that have been wrecked and rebuilt can re-enter the used-car market, but only if that’s noted on the title. Title-washing is what happens when rebuilt cars are registered in a different state in order to get a clear title.

It could also be that the car sustained serious damage, but not enough to affect the title. It takes time for accident reports to reach Carfax and other databases. In that case, only the repair records or a close inspection of the vehicle could have told Brandon the car’s history.

Carfax might be the one that advertises on TV, but there are multiple databases for information about used cars.

Our corporate overlords at Consumer Reports investigated this problem back in 2009, looking at discrepancies between the reports in vehicle information databases (there are a bunch of ’em) and the actual histories of cars being sold as salvaged. The investigation turned up the same lesson that Brandon had to learn the hard way.

We found that the reports were most likely to be incorrect for vehicles that had serious damage but for various reasons were not declared a total loss.

“Salvage,” or similar branding on the vehicle title, is required by many states for vehicles with extensive damage. Wrecks can maintain clean titles if the vehicle doesn’t have collision insurance, is self-insured as with many rental and fleet vehicles, or has damage falling below the “total loss” threshold, which can vary by state.

Clean-title wrecks, especially those with clear history reports, are popular at auctions because buyers can repair the vehicles and then resell them to unsuspecting consumers.

Depending on how much this information affects the trade-in value of Brandon’s car in the present, he may want to consult a lawyer. Government agencies that might be interested include the DMV and the Consumer Protection Bureau.

Don’t rely on used-car-history reports [Consumer Reports]

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