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Can I Buy a Flooded Car and Then Fix it to Obtain a Title in Georgia?

Date: 03/31/2017 |Category: Buyer Tips, Salvage Cars

A flood can quickly destroy even the newest, nicest, and most well-maintained vehicles. Georgia is vulnerable to some volatile weather—rapid flooding, hurricanes in the south, tornadoes in the north, and the ever-looming specter of intense thunderstorms.

Cars that have been flooded in Georgia are typically branded a total loss by the insurance company. This can make it difficult to resell the cars, and nearly impossible to affordable restore them to their original condition. Before yo buy a flooded car and attempt to fix and resell it in Georgia, here’s what you need to know.

Georgia Flooded Title Cars

Some states have a specific class of title for flooded cars. Georgia is not among them. Instead, sellers and owners must note on the vehicle history report that the car has been flooded. It’s up to purchasers to check this report for a history of flooding.

In most cases, a flooded car will be a salvage vehicle, and Georgia does require a special title for these cars. Salvage vehicles are cars that have been declared a total loss by an insurance company, because the cost of repairing the car exceeds the value of the car, or exceeds the policy limits. If an insurer has decided that the car is not worth replacing, and if the car is flooded, it’s a pretty strong indication that the car needs extensive work. That’s why buyers should always be skeptical when provided an opportunity to purchase a salvage vehicle.

Why Floods Are a Problem for Cars

So what’s wrong with a flooded car? If you’re hoping for just a beater car, or a car you can refurbish and sell, you might think that a flood car isn’t a bad investment. The problem is that, without a vehicle history report and a careful inspection by a qualified mechanic, you don’t know what condition the car is really in. Cars that appear extensively damaged might have only cosmetic damage and still be safe to drive. Meanwhile, cars that seem perfectly fine could be ticking time bombs, with unstable frames, dangerous damaged seats, and other serious issues.

Oftentimes the damage to a flooded car can be repaired. The problem is that repairs are expensive and extensive. In many cases it’s simply cheaper and easier to buy a new car. So for purchasers of a flooded car, the purchase is a gamble—and one that does not always pay off.

Georgia’s Title Rebuilding and Restoration Process

Georgia allows purchasers of salvage and flood cars to rebuild the car and restore the title. However, the title will still be marked as a restored title, which can somewhat diminish the car’s value. That’s why it’s important to ensure that you can repair the car for less than market value, and that a slight decrease in market value will still be worth selling. Otherwise you’re likely to lose money on the sale.

Georgia’s title restoration process is rather involved. To apply for a restored title, you must be a licensed rebuilder. So don’t even think about pursuing title restoration unless you plan to make it an ongoing business. You must also pass a detailed inspection that requires documentation of any and all repairs, a before and after photo of the vehicle, a number of forms, a $100 fee, and receipts evidencing all work put into the car. If you don’t have the time or inclination to research this process and meet Georgia’s title rebuilding demands, a flooded car repair might not be worthwhile.

The Dangers of Title Washing

Some purchasers of flooded cars are tempted to forgo Georgia’s title restoration process. Instead, they attempt to obscure the fact that the car was a flooded vehicle by driving the car to another state and registering it there. That might seem like a good idea at first blush, but it’s actually an illegal strategy called title washing.

Title washing can land you in jail. It also subjects you to civil penalties if you sell a flooded car and the buyer loses money or is injured by the car. The truth almost always comes out in these scenarios, so resit the temptation to break the law and engage in title washing.

Tips for Buying and Selling a Flooded Vehicle

If you hope to make a profit selling a flooded vehicle, a few simple tips can help you optimize your chances:

  • Seek a rebuilder license, as well as a dealer license so that you can go to the best dealer auctions.
  • Build a relationship with a mechanic you trust, who can inspect the cars you buy and help you make wise choices.
  • Know each and every car you buy well. Know its value. Know how much it tends to go for. Know whether a purchase is a good or bad investment.
  • Keep your eye our for collectors vehicles and other cars that might be a savvy investment in spite of their flooding status.
  • Never, ever engage in title washing.
  • Only buy cars that can safely and affordable be restored.
  • Always seek a vehicle history report on each car. This provides you with vital information about the extent of damage to each vehicle, as well as an idea of how much you can expect to spend restoring the vehicle.
  • Maximize your profit potential by seeking a rebuilt title.

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