US States Rebuilt Title Rules

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

By Mike Richards Posted: 08/18/2017

Buying a car can be stressful, particularly when—as is almost always the case among car buyers—you’re concerned about finances. Used cars offer significant advantages over new cars, but the used car market is increasingly competitive, not to mention expensive. That’s why so many buyers are turning to salvage cars. A salvage car is one that has been declared a total loss by the insurer because the cost of repairing the car is greater than or equal to 50% of the car’s total value. Note that this is a lower threshold for salvage status than in some other states, so salvage cars in Iowa may actually be of slightly higher quality.

Cars that have been flooded are often deemed salvage titles, making their way into this potentially exploitative market.

Buying a flooded car in Iowa can be tricky, particularly if you’re new to the market. But if you’re cautious, take time to educate yourself, and diligently repair the car you purchase, you may be able to sell it for a significant profit. Here’s what you need to know.

About Flooded Cars in Iowa

Cars damaged in a flood often look fine. In fact, many dealers attempt to pass off flooded cars as used cars or, if they are new enough, even as new cars. This is why it’s so important to investigate the history of any and all cars you plan to purchase, not just those dubbed flood cars. But flood cars are particularly problematic because it’s impossible to tell by a visual inspection alone whether the car is safe to drive, or in good mechanical order.

Many flooded cars have significant damage to the undercarriage, such as rust. Others have damaged engines, or have had their engines replaced with lower quality engines that may be decades old. Some have molded or mildewed seats, while others have significant damage to the frame.

This doesn’t mean you shouldn’t buy a flooded car, but it does point to the need for caution when entering the flooded car market.

Flood and Salvage Titles in Iowa

Flooded cars in Iowa are branded with salvage titles indicating the car’s history as a damaged car. This serves as a warning to consumers, so if you are purchasing a car designated with this title, you need to proceed with caution. Salvage title vehicles can’t usually be driven until they’ve undergone an inspection, so proceed accordingly when you purchase a car branded with a salvage title.

Can I Buy and Repair an Iowa Flooded Car to Get a New Title?

You can repair salvage cars in Iowa and can apply for a new title once you prove that the car has been rebuilt and submit it to an inspection. Note that the higher quality the parts are that you use, the more likely it is to sell for a good price. Of course, you’ll need to balance the cost of repairs with the final value of the sale, so proceed accordingly.

Iowa salvage titles can receive a new, clean, non-salvage title. This can be attractive to buyers seeking a discount on a salvage car. However, it is impossible to conceal a car’s history as a salvage vehicle, because former salvage vehicles will be stamped with the designation “prior salvage” on the title. This remains on any subsequent renewal, registration, or title, and attempting to hide it is a crime known as title washing.

Tips for Successfully Entering the Iowa Flooded Car Market

Flooded cars are in demand. They can be fun to repair for enthusiasts, and they offer significant discounts over the standard price of most used cars. Entering this market requires skill and dedication. It’s not a get rich quick scheme, and you won’t succeed overnight. You may even lose money at first. If you wish to successfully buy and sell flooded cars in Iowa, here are some strategies that can maximize your chances for success:

  • Apply for a dealer’s license. This allows you to attend dealer auctions, which offer higher quality cars and lower prices. Iowa law requires anyone who buys and sells more than six salvage cars in a calendar year to procure a dealer’s license.
  • Know that some salvage cars may be stolen, so seeing a copy of the title, and verifying that it is not fraudulent, may keep you out of jail.
  • Become active in your local dealer community. These are experts who can mentor you, let you know whether your strategies are likely to be effective, and welcome you into the dealer community.
  • Get to know the car market. Figure out which cars are in demand locally, and focus on providing those cars to buyers.
  • Know cars. You can’t assess a car’s value if you don’t know what makes it valuable to a potential buyer.
  • Set a clear budget for each car you purchase, and stick to it. Don’t allow bidding wars and ego to drive up the price of a car that should sell cheaply.
  • Request a copy of the title of every car you intend to buy, and conduct a vehicle history report before purchasing the car.
  • Never attempt to obscure a car’s history as a salvage or flood vehicle. This illegal strategy, known as title washing, can land you in jail or in a costly lawsuit.

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