When we lived in Athens, Lori and I had fun times with a couple of used cars: a Honda Civic that my mechanic declared "an impossible perversion of Japanese engineering," and a Pontiac Sunfire that ran great and was almost absolutely a salvage vehicle. I liked the Sunfire, but had to give it up when we moved from Georgia to North Carolina since it wouldn't pass state inspection. (That's when I got my Scion xB, my most favorite car, ever.)
I channeled those experiences into the research for a new article on Insure.com about "the secret history of used cars." Dealers across the country have been selling salvage vehicles (like Cash for Clunkers and Katrina Cars), and the ramifications on your credit and your car insurance can be huge. Some of these cars may be totally sound and safe, but there's often little way of knowing, especially if the dealer has tried to cover things up.
A "gray market" exists for vehicles with flood titles or salvage titles. Safety experts warn that cars with salvage titles could easily buckle in a crash if repaired incorrectly. Flood titled cars could fail or rust quickly, according to consumer advocates. Some buyers and sellers, especially in states with no formal inspection program, knowingly trade used cars with such titles because they're cheap.