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

Date: 08/16/2017 |Category: US States Rebuilt Title Rules

Delaware has long been a business hub, known as a state that’s friendly to capitalism with a favorable regulatory climate. The salvage car industry in this state is no exception, and skilled dealers can earn significant profits if they know what they are doing. Buying and selling flooded cars, then fixing them to obtain title, is not for the faint of heart. This undertaking requires skill and time, so you should only do it if you’re willing to invest both. Here’s what you need to know.

What You Need to Know About Flood Cars

Just an inch of water is enough to sweep a car off of the road, causing significant damage. A few inches of water can fully flood a car. So it doesn’t take a hurricane or natural disaster to wreck a car. And the damage is more than just a little moisture. Flooded cars are prone to a number of issues, and it’s impossible to discern the state of the car based on cosmetic appearance along. Some of the issues flooded cars face include:

  • Damage to the frame from the vehicle being knocked around during a flood.
  • Hail damage that cannot be repaired.
  • Mold or mildew deep in the seats.
  • Damage to seatbelts or other internal structures that makes passengers unsafe.
  • Rust to the car’s undercarriage.
  • A damaged or destroyed engine.
  • Problems with wheel alignment.

Any car can be a flood car. One of the problems with flooded vehicles is that they are sometimes stolen cars. When an insurer declares a car a total loss, thieves may steal it. In other cases, they may forge a title indicating the car is a salvage vehicle. So prospective purchasers should be careful when purchasing not just flooded cars, but any used car. Unscrupulous dealers can try to pass off a salvage car as a used car, and you simply cannot be certain of what you are buying without a detailed history report on the car.

Salvage Vehicle Regulations in Delaware

In Delaware, a salvage vehicle has already been rebuilt. Some states assign salvage titles to any car declared a total loss by an insurer. In Delaware, however, salvage vehicles must meet two criteria:

  • Declared a total loss because the cost of fixing the vehicle is greater than or equal to 75% of the vehicle’s total value. Virtually all flood cars are salvage cars because of the extensive damage even a small flood can cause.
  • Has been substantially rebuilt and met state salvage vehicle requirements.

Thus a car deemed a flood vehicle that has a salvage title has already undergone significant work. If you plan to sell the car, or to repair cosmetic damage, a car with a salvage title is a safer bet than one without such a title. And if the car does not have a salvage title but a title report shows a history of flooding, don’t even think about purchasing it at fair market value!

Can I Fix Up a Flooded Car and Get a Clean Title in Delaware?

Salvage vehicle repair guidelines focus on making the car road ready, including repairing damage to the engine and other vital parts. So cars with a flood history that also carry a salvage title may be safe purchasing bets.

Here’s the bad news: once a car has been flooded and assigned a salvage title (or a salvage certificate after being declared a total loss, but before being repaired), that history will remain with the car forever. There’s no way to hide the car’s salvage history, or to get a fully clean title. However, because Delaware salvage cars have been significantly repaired, you should still be able to get a decent price for such cars—usually about 5% below the price of a similarly priced used car. If the car is a one of a kind, a vintage vehicle, hard to find, or in pristine cosmetic condition, the value increases.

Tips for a Successful Salvage Car Repair and Sales Business

If you’re interested in breaking into the salvage and flooded car business in Delaware, know that you can make money. But just like anything else, this business requires skill and diligence. To maximize your profits and reduce risks:

  • Always ask for the title on any car you’re considering buying, and get a vehicle history report. Some salvage cars are stolen. Some used cars are actually salvage vehicles. Never blindly rely on the word of a seller, no matter how trustworthy they seem.
  • Know which cars are in demand, and which are not. Buying a car for a high price is a bad bet if it’s not hard to find. The market is competitive, so know it well.
  • Ensure you have access to a skilled mechanic who can inspect and repair each and every car you purchase.
  • Register for a dealer license, so that you can attend dealer auctions. It’s worth it to do so even if you don’t intend to make buying and selling flood cars your career or full-time job.
  • Become involved in your local dealer community.
  • Don’t allow ego to guide your purchases. Bidding wars drive up prices on otherwise worthless vehicles. Set a price you’re willing to pay, and stick with it, even under the influence of an adrenaline rush at auctions.
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