Regulator Warns Consumers to Expect Flood Damaged Vehicles to Hit Ontario Marketplace

TORONTO, Nov. 15, 2012 /CNW/ - Ontario's regulator of motor vehicle sales, OMVIC, is warning consumers to brace for an influx of storm and flood damaged vehicles in the aftermath of Hurricane Sandy. "US authorities have told us it's only a matter of time before some of these vehicles find their way onto the auction blocks; ultimately, some will be imported to Ontario" stated OMVIC Manager of Communications, Terry O'Keefe.

"There is a historical pattern to this" explained O'Keefe. "After Hurricane Katrina we saw many flood-damaged vehicles find their way to Ontario: While the total number of flooded vehicles in the US Northeast is not yet known, car buyers need to be vigilant. A flood damaged vehicle can be dangerous."

Dangerous Vehicles

Carey Smith, OMVIC Director of Investigations agrees. "Water, especially salt water like we saw in Sandy's storm surge, can get inside sensitive electronic components and cause corrosion. It can take months or years for the effects of this exposure to show - but when it does, it can be catastrophic: air bags might not deploy in a collision, engines could shut off at highway speeds, steering could fail - these vehicles are not safe for the road".

Branding

Under Ontario's mandatory branding program, imported vehicles from the US branded as "Flood Damaged", would automatically be branded by Ontario's Ministry of Transportation as "Irreparable", meaning they could not be licensed and put on the road. Unfortunately, because branding is not fully reported in the US, it is possible for unscrupulous sellers there to buy flood damaged vehicles, transfer them to a state without full branding, and "wash" the title clean of any flood or salvage brand.

"Another concern" said O'Keefe, "will be the sale of vehicles that were not insured for this kind of loss. These vehicles won't be reported to insurance companies and therefore won't get branded; some owners may dry them out and sell them or trade them in, to try and recoup their loss. Consumers in Ontario must really pay attention to the history of a vehicle they are interested in including where it's from".

Consumer Rights

Ontario consumers who buy from registered dealers do have protection. According to the Motor Vehicle Dealers Act (MVDA) dealers must make specific disclosures including if the vehicle:

• has been branded
• sustained collision or incident damage in excess of $3000
• was registered in another jurisdiction (province or state), and if so, where
• was immersed in a liquid (that penetrated at least to interior floorboards)

This protection is only available to persons who buy from registered dealers. Individuals who buy privately are not protected by Ontario's consumer protection laws and they also risk becoming victimized by curbsiders - illegal sellers of vehicles. Curbsiders often pose as private sellers but are actually in the business of selling cars. "Curbsiders commonly buy salvage vehicles, conduct dubious repairs, and sell them to unsuspecting consumers" explained O'Keefe. "The availability of these "Sandy" cars will undoubtedly provide a new stream of inventory for these unscrupulous sellers".

OMVIC wants consumers to be warned and informed. Some of the damaged and flooded vehicles from the US Northeast will slip into Ontario. Consumers should understand the dangers they pose and learn how to protect themselves; this includes purchasing a vehicle history report (such as CarProof or Carfax), having a vehicle inspected by a trusted, independent mechanic and determining if a vehicle was previously registered in one of the affected states at the time of the storm. Both CarProof and Carfax are assisting by making free "Flood Brand" checks available on their websites.

Click here for more information about Ontario's mandatory branding program.

About OMVIC:

The Ontario Motor Vehicle Industry Council (OMVIC) administers and enforces the Motor Vehicle Dealers Act (MVDA) on behalf of the Ministry of Consumer Services. OMVIC maintains a fair and informed vehicle sales marketplace by regulating dealers and salespersons, regularly inspecting Ontario's 8,000 dealerships and 24,000 salespeople, maintaining a complaint line for consumers and conducting investigations and prosecutions. OMVIC is also responsible for administering the Motor Vehicle Dealers Compensation Fund on behalf of its Board of Trustees.

SOURCE: Ontario Motor Vehicle Industry Council - OMVIC

Terry O'Keefe
Manager of Communications, Media Relations and Education
416-226-4500 x 3525
Email: [email protected]
Web: www.omvic.on.ca
www.buywithconfidence.ca