Auto Fraud - Failure To Disclose Damages
Signs of a Wreck
At CSI-NC, we know the Signs of a Wreck and Danny Wyatt owner of CSI-NC wrote the book for consumers how to inspect a used-car for prior repairs. CSI-NC knows the flaws in CARFAX and AutoCheck reports along with all the other vehicle history reporting companies’ reports. So Buyer Beware! Click on the book.
As experts, we have seen CARFAX history reports as the vehicle having minor damage, when actual damages were $10,000 or more. Therefore it is smart for the new/used car dealer or used-car buyer never believe CARFAX'S description as to type of damages the vehicle sustained.
CSI-NC owner Danny Wyatt offers expert-witness research service to both defense and plaintiff attorneys on failure to disclose damage cases to see if the alleged failure to disclose damages claim is worth pursuing.
N.C. Damage Disclosure Statutes
Each state has different requirements to both car dealers and vehicle owners when trading or selling a damaged repaired vehicle; yet all states require the disclosing of total loss rebuilds, flood and stolen and recovery vehicles by the seller. In North Carolina, if a new untitled vehicle sustained damages 5% or more of the M.R.S.P. price, the new-car dealer is to disclose the damages to the potential buyer. On used-cars, when damages reach or exceed 25% of the N.A.D.A. value of the vehicle, disclosure of damages is require upon sell or trade, despite the "five model years rule."
North Carolina damage disclosure laws even vary, for example: the "five year model rule / air-bag restraint system rule. This rule places the seller in a "Catch 22" situation since year model / airbag restraint is omitted on the North Carolina Certificate of Title.
§ 20-71.4. Failure to disclose damage to a vehicle shall be a misdemeanor.
(a) It shall be unlawful for any transferor of a motor vehicle to do any of the following:
(1) Transfer a motor vehicle up to and including five model years old when the transferor has knowledge that the vehicle has been involved in a collision or other occurrence to the extent that the cost of repairing that vehicle, excluding the cost to replace the air bag restraint system, exceeds twenty-five percent (25%) of its fair market retail value at the time of the collision or other occurrence, without disclosing that fact in writing to the transferee prior to the transfer of the vehicle.
(a1) For purposes of this section, the term "five model years" shall be calculated by counting the model year of the vehicle's manufacture as the first model year and the current calendar year as the final model year. Failure to disclose any of the information required under subsection (a) of this section that is within the knowledge of the transferor will also result in civil liability under G.S. 20-348. The Commissioner may prepare forms to carry out the provisions of this section.
My comments to this particular section are:
Many individuals that have had a damaged vehicle repaired generally have no clue as to what the percentage of damages is to the vehicle’s actual cash value (ACV)
If the vehicle owner kept the original “repair estimate”, they should know the cost of replacing the airbag system or “Safety Restraint System (SRS).” Reading a repair estimate may be tricky for some people and they still may have no idea about the total amount of replacement cost. The North Carolina “Certificate of Title” damage disclosure section does not mention anything about "year model" or even the "Safety Restraint System" as shown below.
Vehicle History Reports Flaws
Not all 50 states provide accident information, yet North Carolina is a state that ALLOWS accidents to be made publicized. Not one publicizing vehicle history reporting company has all the facts. So buyer, beware!
Companies such as AutoCheck and CARFAX vehicle history reporting agencies rely on paid and volunteer sources. When you see an AutoCheck or CARFAX reporting Very Minor, or Minor - Moderate damage BEWARE. and BE CAUTIOUS of that vehicle. The very minor damage is 99% of the time misleading to actual damages sustained. North Carolina’s local and state law enforcement agencies follow the NCDMV 349 Crash Report Instruction Manuel where “0” being no damage and “7” being the most severe damage. The 0-7 scale is misleading due to the fact the investigating officer is not trained in collision repair and is merely guessing the severity of damage.
Dealers increasingly take advantage of the lag time between an accident and the information getting to CARFAX The dealer will knowingly take a vehicle in on trade or buy a car at auction that has been wrecked and market it as a clean CARFAX car. The dealer knows of the lag time that the wreck history is not yet showing up on CARFAX. And "not one publicizing vehicle history reporting company has all the facts." So buyer, beware!
Vehicle history reports DO NOT SHOW dealers transferring a vehicle to another dealer.
Auto insurers DO NOT report damaged-repaired vehicles to any publicized vehicle history company.
CARFAX Disclosure: CARFAX does not have the complete history of every vehicle. A CARFAX Vehicle History Report is based only on information supplied to CARFAX. Other information about the vehicle, including problems, may not have been reported to CARFAX. Use a Vehicle History Report as one important tool, along with a vehicle inspection and test drive, to make a better decision about a used car.