We recently filed a lawsuit for clients who were sold a car with flood damage by a used car dealer. Cars with significant flood damage are often declared a total loss. States like Texas require the titles to these cars be branded with “FLOOD DAMAGE” or some other indication that the car was declared a total loss.
Often, cars from Texas and Louisiana that were flooded in hurricanes and tropical storms magically make their way to used car lots in Arkansas through wholesalers and auctions and then sold for low prices, $4,000 and under. Consumers might look up the value of the make and model of these cars on websites like Kelly Blue Book and think they are buying the vehicle at a significant discount. Also, buying a used vehicle for under $4,000 means the consumer is not obligated to pay sales tax when it is registered, which appeals to consumers.
Federal and Arkansas law requires a used car dealer to show the consumer the vehicle’s title in these types of transactions. Fraudulent used car dealers, however, will say the title isn’t at the dealership and it will be mailed in to the consumer in a few days. When the title arrives, the consumer and the revenue office see the “FLOOD DAMAGE” brand and will not register the vehicle. These types of vehicles are unsafe and the State of Arkansas won’t allow them to be driven on our highways.
If a used car dealer sells you a flood damage car, or a car that was declared a total loss, due to an wreck, please contact us to review your case!