Before browsing car dealerships and auto classifieds, shoppers research financing options, compare gas mileage specs, and may consult ConsumerReports.org for safety ratings. This multi-faceted list grows markedly when someone decides to purchase a used vehicle, an endeavor that necessitates additional research and precautions.

Exercising common sense and being aware of scams will also help consumers steer clear of “lemons.” To this end, the National Insurance Crime Bureau (NICB)—and, by extension, its more than 1,000 P&C insurers and self-insured member organizations—is educating consumers about potential red flags that indicate a deal really is “too good to be true.”

For instance, a scheme involving salvaged automobiles is picking up speed, NICB cautions. As severe weather and flooding continues across much of the U.S., many vehicles will be subjected to storm and water damage. As a result, affected vehicles may be declared “total losses” by P&C insurers and subsequently sold as salvage.

“While there are legitimate ways to acquire and use a salvage vehicle, many scam artists will often hide the fact that a vehicle was flooded or declared as salvage seeking to sell it for a handsome profit to some unsuspecting consumer,” the NICB stated in a recent press release. “People who engage in this kind of scam are very good at masking the telltale signs of water inundation and unless you know where to look—or smell—you are risking serious financial hardship.”

To help prevent this kind of scam, which was documented in the aftermath of Hurricane Katrina in 2005, the NICB created VINCheck^SM, a free service that allows consumers to search the salvage and unrecovered stolen records of participating NICB member insurance companies. Consumers may run as many as five vehicle identification numbers (VINs) each day.

NICB stresses that, absent any state or local laws to the contrary, buying and selling salvage vehicles is legitimate when all parties to the deal are fully informed of the vehicle's history.

“Good used vehicles are bought and sold every day across the country without any hint of fraud,” the NICB said. “There is a legitimate role for salvage vehicles in the marketplace.”

Selling a salvaged/flood vehicle without informing the buyer, however, is another issue.

So if a late-model vehicle that could normally fetch $25,000 is being offered for $15,000, be leery. Staying informed will help identify and prevent this type of fraud so drivers can avoid unwanted financial detours and P&C insurers can eschew unnecessary risks and costs.

A list of considerations when purchasing a used vehicle can be found on the NICB Web site. Access VINCheck here.

Special Reports /

Used-Vehicle Scams Surface After Floods

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