Watch Out for Salvage Cars

Since Hurricane Katrina in 2005, there are thousands of cars on the used car market that were damaged in the storm. In some states, these cars must carry "salvage" or "flood-damaged" titles so that consumers will know what they are buying, along with potential associated problems.

However, in many other states (see list below), cars that have been damaged and written off as total losses by insurance companies can reappear on the market with clean titles. Cars with salvage titles in one state can be moved to a "clean title" state to be sold to unsuspecting buyers. This is called "title washing."

Flooded or storm-damaged vehicles can often appear to be in good condition. Therefore used-car buyers should take extra caution to inspect any vehicle they may be considering. Look for signs of water-stained carpets, trunk liners, mud under the hood, rusted metal, and upholstery damage.

Following are a list of states that do not have salvage titles: Arizona, Arkansas, California, Illinois, Indiana, Kentucky, Maine, Michigan, Mississippi, Missouri, New Jersey, New York, North Dakota, Ohio, Rhode Island, Texas, and Vermont.