If a vehicle has been damaged by flood, what must a dealer do?

When a vehicle has been damaged by flood, it is essential for a dealer to disclose that flood damage to potential buyers. This requirement is rooted in the principles of transparency and consumer protection. Disclosure ensures that buyers have all the necessary information about the vehicle's condition, which helps them make informed purchasing decisions.

Flood damage can lead to significant and sometimes hidden issues, including electrical problems, mold growth, and structural damage. By informing potential buyers about the flood damage, the dealer is adhering to ethical practices and legal obligations that promote honesty in the marketplace. This practice also protects the dealer from potential liability claims from buyers who may feel misled if the flood damage is not disclosed.

In contrast, repairing the vehicle before selling it or selling without disclosures would not provide the same level of consumer protection and might expose the dealer to legal repercussions. Only disclosing the damage if specifically asked by the buyer falls short of the dealer’s obligation to proactively communicate material facts about the vehicle, thus putting the dealer and buyer at risk and undermining trust in the transaction.