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

Date: 08/25/2017 |Category: US States Rebuilt Title Rules

Salvage cars are abundant in Ohio, thanks in part to the state’s idiosyncratic salvage car rules. If you’re in the market for a used car, or looking to make a quick buck, a salvage car offers significant benefits, including steep discounts below the price of similar used cars. So should you buy a flooded car in Ohio? Maybe. It depends on how much work you’re willing to do, how much you understand about the process, and whether you’re able to get a flood car that’s truly a good deal—not one that just deceptively appears to be so.

What You Need to Know About Flooded Cars in Ohio

In Ohio, a flooded car cannot be sold on the open market. This might seem odd, but there’s a very good reason. Cars that have been flooded can suffer extensive damage that is not visible based on cosmetic appearance alone. Just a few inches of water can flood a car, yielding catastrophic damage such as:

  • A rusted engine or undercarriage
  • Mold, mildew, or fungus in the seats
  • Damage to fuel pumps and other vital parts
  • Damage to the car’s frame, disrupting alignment

You can’t judge the quality of a flooded car based solely on how it looks, so it’s vital to have the car inspected by a mechanic. Moreover, you should know that any car sold by a private dealer may be a flooded vehicle. Some unscrupulous sellers attempt to obscure a car’s flood history by registering it in another state or marking it a used or salvage car that has not been flooded. Always be careful when making a purchase.

Salvage vs. Flooded Cars: Is There a Difference?

All flooded cars are salvage vehicles, but not all salvage vehicles are flooded vehicles. In Ohio, a car that is rebuilt to such an extent that it alters the fundamental character of the car, or that has been declared a total loss by the insurer, must be registered as a salvage car. This status indicates that the cost of repairing the car is close to, or in excess of, the cost of the car itself.

Flooded cars must be salvaged if the flood has caused severe damage. In most cases, an insurer will automatically label a flooded car a salvage car, because the cost of repairing these cars isn’t usually worth it.

In Ohio, cars that have been designated salvage cars cannot be driven on the open road. This is an important consideration if you’re contemplating buying such a car. Not only must you find a way to transport it. You also must repair it if you want to have any hope of selling it to an interested buyer. Very few buyers, other than dealers, will willingly invest in a car that can’t be driven, so proceed accordingly.

Rebuilding a Flooded Car in Ohio

In Ohio, it’s possible to rebuild a flooded car and seek a new title. However, the title won’t be a clean title. Instead, you’ll get a salvage rebuilt title. This title indicates that the car has been built to state specifications, but ensures that purchasers know the car has a salvage history. Such a designation tends to drive down the price of the vehicle by about 5 percent below its market value. But if a car is in demand, you may still be able to recover a tidy profit.

Some buyers attempt to obscure the fact that a car has a salvage history by driving it to another state to register it, or forging a title. Doing so is a crime that can subject you to serious penalties. It’s also easy to detect, and can destroy your burgeoning car business. Resist the temptation.

Tips for Making the Most of Flooded and Salvage Cars in Ohio

It’s possible to build an entire business around the purchase and sale of Ohio salvage and flooded cars. To be successful, though, you need to take some time to educate yourself about the industry. You’ll also have to be prepared to occasionally lose money on a sale, since there are no guarantees in this business. Consider the following tips to get the most out of your business:

  • Seek a dealer’s license, even if you only plan to buy one or a few cars. A dealer’s license enables you to attend auctions, which typically offer significantly better cars at much better prices.
  • Become involved in your dealer community. Don’t avoid other dealers just because they are your competitors. They’re also your best source of information about the industry, and can offer you mentoring and other assistance.
  • Request a copy of the title on each car you purchase, and use it to get a vehicle history report. Never buy a car on the word of the seller alone.
  • Rebuild the car in such a way that you can make money. In some cases, it makes sense to do much more than Ohio requires. For example, if you have purchased a high-value collector’s item, displaying it in like-new condition makes sense. If, however, you have purchased a run of the mill vehicle that’s in decent cosmetic condition, doing the bare minimum might be a better option. An expert in the industry can help guide you as you begin.
  • Form a relationship with a mechanic you trust.
  • Purchase only cars you know well. Knowing the industry, as well as cars that are in demand, increases your likelihood of making a profit and successfully selling various cars.
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