Dealerships, car owners upset with Carfax's advisory about possible flood damaged vehicles after Sandy
Jennifer Leadroot’s 2006 Volkswagen Passat did not see a drop of rain during Hurricane Sandy — it was inside her garage in a Cape May Court House neighborhood barely touched by storm damage.
Yet a vehicle-history tracking company placed an alert on her car and millions of others registered in eight New Jersey counties, including Atlantic, Cape May and Ocean.
“The car was totally protected from the storm. When I went to trade in the car (at Burke Motor Group), I didn’t even realize it,” said Leadroot, 33, a physician’s assistant.
For nearly a week — from about Nov. 16 to 21 — Centreville, Va.-based Carfax put an advisory on all vehicles registered in Federal Emergency Management Agency-declared disaster areas.
The advisory brought a stern response from the New Jersey Coalition of Automotive Retailers, a trade group representing more than 500 dealers, that said the alert — based not on actual damage reports but on the county of vehicle registration — could have devalued nearly 5 million vehicles had it continued.
Carfax spokesman Christopher Basso said the company, which offers the reports as a paid service, stopped including the advisory as of Nov. 21. A single report costs $39.99.
However, Carfax’s website does include a free flood check report that still includes a similar statement for such vehicles: “Alert! Hurricane Sandy may not have damaged this vehicle, but it was registered or located in a coastal region within a major disaster area declared by FEMA. As a reminder, please get this vehicle inspected prior to purchase.”
Basso said the public service announcement was meant to be temporary, but also a reminder for potential vehicle buyers to be careful about unknowingly purchasing flood-damaged cars, particularly before insurance companies processed them.
“We started getting information related to those vehicles, and we felt the public service announcement was no longer necessary,” he said.
The company issued a similar alert once before, after Hurricane Katrina, he said.
Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said the Carfax alert had no bearing on any facts about the vehicles.
“Our concern is when you provide information that doesn’t relate to the actual condition of the vehicle and that affects a population of vehicles — 99 percent of which are not storm-impacted at all — it’s a meaningless report,” he said. “And, worse still, it diminished the value of vehicles that dealers could take in trade because dealers can’t wholesale those vehicles at fair market price if they carry this quote-unquote brand,” he said.
If the advisory had stayed in place, it would have affected dealerships, which are large buyers of used cars, as well as individuals, he said.
Rich Woehlcke, of the Villas section of Lower Township, is selling his 2003 Honda CR-V. He took out a classified ad in The Press of Atlantic City specifically stating, “no flood damage.”
Woehlcke said he was surprised to hear about the Carfax advisory, but his car had only been on the market for a day as of Friday.
“I can’t say I’m affected yet, but I can’t say I’m not. Maybe two weeks from now I’ll know if it had an effect,” he said.
Gina Freon, who, with her husband, Franck, owns Pumpkin Fine Cars & Exotics in Egg Harbor Township, also noticed the Carfax flood advisories but said she didn’t think they’d be problematic.
“It was only an advisory. It wasn’t saying the car was flooded,” she said. “It’s just kind of a reminder for both parties.”
Leadroot noticed the Carfax report when she tried to trade in her car at Burke Motor Group in Cape May Court House for a newer-model 2010 Volkswagen.
The advisory showed up on both vehicles, she said.
Dave Burke, owner of Burke Motors, declined to comment on Carfax, and the dealership referred calls to the New Jersey Coalition of Automotive Retailers.
Leadroot said she felt she got an appropriate trade-in value for her car.
“I was happy with my research. And I live here, and I knew the cars were not in a flood zone,” she said.
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