Laws of Damage Disclosure in North Carolina

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North Carolina vehicle buyers have the right to find out about previous damage.
North Carolina vehicle buyers have the right to find out about previous damage. (Image: George Marks/Retrofile/Getty Images)

By law, you must inform prospective buyers in North Carolina if the vehicle they have an interest in buying underwent repair after significant damage. Prospective buyers must receive information about what the damages and what the repair entailed in writing before they sign a contract of sale. Both individual and commercial vehicle sellers are subject to the state's vehicle damage disclosure law.

New Cars

New car dealers must disclose damage and repair information when it exceeds five percent of the manufacturer’s suggested retail price for the vehicle. They are only required to disclose information about damage that is five percent or less of the suggested retail price if the prospective buyer asks for the information. If the prospective buyer does ask, the seller is required, by law, to answer truthfully. Dealers are not required to disclose information about damage to glass, tires or bumpers if a similar item replaced them.

Used Cars

When selling vehicles less than five years old, the seller must disclose in writing to prospective buyers any damage valued at more than 25 percent of the vehicle’s fair market value. The seller also has to disclose in writing if a vehicle, no matter the age, is rebuilt, salvaged or previously submerged in flood waters. Salvaged vehicles are those in which the repaired damage exceeds 75 percent of the fair market value. A rebuilt vehicle is one in which essential parts are removed, added or substituted.

Types of Damage

The types of damage sellers must disclose to prospective buyers in North Carolina include salvaged and/or rebuilt vehicles, or those with salvaged motors. Sellers must also disclose if complete or partial submersion in water caused damage to the body, engine or transmission of the vehicle. Although not related to damage, sellers must inform sellers about vehicles manufactured in another country and not intended for sale in the U.S. In North Carolina, you cannot title or register junk vehicles that you can't repair or resale.

Penalties

Sellers who do not disclose damage to prospective car buyers can face civil liability that is a misdemeanor charge. Sellers who attempt to conceal the damage by removing from the state the title and supporting documentation can also face a misdemeanor charge. Vehicles rebuilt after the insurance company deems them a total loss have a sticker that reads “total loss claim vehicle” affixed to the doorjamb. If a seller attempts to remove, alter or conceal that sticker they can face a felony charge punishable by a fine of at least $5,000.

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