US States Rebuilt Title Rules

Can I Buy a Flooded Car at Car Auctions in Maryland and Then Fix it to Obtain a Title?

By Mike Richards Updated: 07/22/2018 Posted: 08/18/2017

Flooded cars have flooded Maryland. Superstorm Sandy flooded thousands of cars, and some of them made their way south. Frequent rain storms, natural disasters in neighboring states, and a host of other factors have all conspired to make Maryland a prime location for people wanting to offload flooded cars.

There’s nothing inherently wrong with buying and selling a flooded car at Baltimore auto auction and other car auctions in Maryland, as long as you’re honest with your buyers and know what you’re getting into when you invest in the car. It’s possible to turn a profit, but only if you make good decisions, choosing your purchases, buyers, and sales prices very carefully.

A Note About Flooded Cars

You might be wondering what’s wrong with buying or selling a flooded car. After all, if it looks ok, it’s probably fine, right? Not so fast. Flooded cars often are severely damaged, and cosmetic appearance won’t tell you much about the car’s mechanical status or internal structures. There’s no way to know the extent of flooding damage without a thorough inspection, and a visual examination won’t cut it. Some of the many issues associated with flooded cars include:

  • Rusting of vital vehicle components, including the engine.
  • Extensive damage to the engine that may be irreparable.
  • Mold and mildew growing inside the car, particularly deep in the seats.
  • Damage to the structural integrity of the vehicle’s frame or seats.

Just a few inches of water are enough to destroy a car, so don’t rely on a car’s physical appearance. Only buy a flooded car after an inspection by a skilled mechanic and with the information provided by a vehicle history report.

Maryland Flooded and Salvage Car Regulations

In Maryland, a salvage vehicle and a car with a salvage title are two separate things. A salvaged car is one with damage that meets or exceeds 75% of the total value of the car, and which has been declared a total loss by the insurer. These cars are typically “totaled,” though occasionally an owner may opt to retain a car that has been salvaged. Cars declared a total loss receive a salvage certificate that evidences the owner, but that does not render the car eligible to drive on the open road.

To be eligible to drive on the road, a Maryland salvage vehicle must be registered with a salvage title. To receive a salvage title, the owner must provide proof that the car has been substantially rebuilt and is safe to drive. This means that Maryland cars with salvage titles may be in better condition than those registered with a salvage title in states with less stringent regulations. All salvage vehicles must pass a safety inspection.

Rebuilding Maryland Flooded and Salvage Cars

In Maryland, flooded cars that are registered as salvage vehicles are clearly marked as flood-damaged. Once a car has been branded with this designation, it is not possible to remove it—nor should you try. You can repair the car to receive a salvage title, thereby providing evidence that the car has been restored and is safe to drive. But the salvage designation will remain with the car, perpetually driving down its value.

It’s possible to drive the car to another state and request a rebuilt title—something some states offer, but even this will reduce the value of the car. Some desperate sellers attempt to obscure the car’s flood or salvage history by registering it in another state. This, however, is an illegal scheme known as title washing. Title washing can subject you to both civil and criminal penalties. Resist the temptation and follow the law.

How to Maximize Your Profits and Minimize Your Losses

A flooded or salvage vehicle in perfect repaired condition starts at about 5% below market value in Maryland. Price the car accordingly, and make wise decisions when buying, since no matter how much work you put into the car, it will never fetch as much as a comparable used car.

Some other strategies that can help you make the most of a flooded car, and even begin a thriving business, include:

  • Pursue a dealer’s license. Though it can be costly and time-consuming, a dealer’s license allows you to attend dealer auctions, which typically offer the highest quality vehicles. You don’t have to be a full-time dealer to be eligible for a dealer license.
  • Become involved with your local dealer community. These people are experts on the used and salvage car business. They can connect you with potential buyers, recommend the best auctions, and support you to choose the best cars.
  • Always get a detailed title report and vehicle history report on each and every car you buy. Never blindly trust the word of a seller, no matter how reliable he or she seems.
  • Be prepared to occasionally lose money on a salvage car.
  • Invest in salvage cars that are likely to sell: high-value cars, cars that are no longer available, vintage and collector’s items, and cars in demand in your area.
  • Don’t forget about online auctions, which open you up to a wider audience of potential buyers.
  • Form a relationship with a mechanic you trust, and have him or her inspect each car you purchase.
  • Know exactly which cars you wish to buy, and at which price point. Don’t allow a bidding war to lure you into paying more than you would otherwise agree to pay.

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