Until last year the federal government allowed rundown vehicles to be donated to charity and owners could report a tax write off based on the market value listed in a used car guidebook. Beginning with tax year 2005, Congress enacted legislation changing the tax write off calculation, and charities have witnessed a large reduction in the number of donated vehicles.
Insurance Commissioner John Garamendi warns that many flood-damaged vehicles have made their way to California and advises potential buyers to run a thorough background check before purchasing a used car. Damaged vehicles are moved from state to state until their titles are "cleansed" of their salvage status.