Although it is illegal, some used car dealerships repair cars that have been in accidents or floods and sell them as cars with clean titles, often crossing state lines to do so.
Before You Buy a Used Car
The best way to avoid problems from a damaged car is to avoid buying it in the first place. Services like Carfax and AutoTrack can trace a car's entire history via the Vehicle Identification Number (VIN). Before you buy, ask an independent mechanic whom you trust to check the car over, paying particular attention to any rewelding of the frame or evidence of flood damage.
Title-Washing of Used Cars
Even if the VIN and car history seem to check out okay, you need to look into the possibility of title-washing, a process in which a badly damaged car is repaired in one state, then moved to another state to create a clean title. Only California, Iowa and Michigan have laws protecting consumers against this practice.
What to Do if Your Used Car is Damaged
Dealers are required by law to reveal any damage before you buy a car. If you feel you have bought a car with undisclosed damage, take it to an independent mechanic for corroboration of the damage. Speak to the owner or general manager of the dealership where you bought the car, and demand a replacement. If you don't get satisfaction, go over their heads to the manufacturer of the car, or consider contacting your state's attorney general and filing a lawsuit against the dealer.
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