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Buyer beware: Flood-damaged cars being sold on the sly

·4 min read
Buyer beware: Flood-damaged cars being sold on the sly
Buyer beware: Flood-damaged cars being sold on the sly

It’s only halfway through this year’s hurricane season, but thousands of storm-damaged cars may be flooding the market after Hurricane Ida walloped the eastern coast.

Once the waters recede, tempest-tossed vehicles can make their way back onto the roads — sometimes with the new owner completely in the dark about the vehicle’s history.

For drivers looking to get a good deal on a used car, that sweet new ride could turn out to be one sour lemon.

Waterlogged cars can still be resold

Young couple buying a used car from a dealer.
Alfa Photostudio / Shutterstock

When a vehicle has been badly damaged in a hurricane or flood, insurance companies will often categorize the car as a total loss, assign it a “salvage title” and sell it to a junkyard or vehicle rebuilder.

A car with a salvage title can’t be driven on public roads in most states. However, rebuilders can repair the cars and have the vehicle reinspected to qualify for a rebuilt title. Then they can be legally driven and resold.

But sometimes, owners won’t report the damage; maybe they weren’t covered by affordable, comprehensive auto insurance and couldn’t make a claim. Then the damage won’t show up on the vehicle’s title, and the owner may try to pass off their soppy jalopy to unsuspecting buyers.

Even if the damage is reported, less scrupulous dealers will resell fixed-up cars under a new title in states that have more relaxed title laws.

Thousands of cars are damaged or destroyed by floods every year, Consumer Reports says, and many of them are transported to different states to be resold to drivers who don’t recognize the signs of a water-damaged vehicle.

Last September, Carfax estimated that more than 446,000 flooded cars were back in use nationwide.

What to watch out for in a used car

Portrait of a mechanic inspecting the underside of a car.
Minerva Studio / Shutterstock

A car once classified as a salvage vehicle will probably come at a low price, but water can really trash a car’s mechanical, electrical and safety systems.

Even if the vehicle is roadworthy now, damage from flooding can take months or years to reach a car’s internal systems — and even then it can be difficult for the untrained eye to spot. And interior contamination of bacteria and mold can make an unsafe environment for your family.

Consumer Reports says there are some telltale signs a car has been submerged in water. It suggests you inspect:

  • The carpeting. Is it muddy or musty? Alternatively, is it suspiciously new in an old car? Does it match the brand of the car?

  • Exposed screws. Check both the seat-mounting screws to see whether the seats have been removed to help dry the carpeting and check any other exposed screws for signs of rust.

  • Difficult-to-clean places. Inspect all the nooks and crannies like gaps in panels in the trunk or hood or on the bottom edges of brackets and panels for signs of mud or debris.

  • The lights. Flooding can leave a visible waterline on a car’s lens or refractor.

How to avoid ending up with a salvaged car

Close up of man using laptop and writing notes.
TippaPatt / Shutterstock

Since it may not be obvious a car has been damaged by floodwaters, or shady sellers may have “washed” a title by making undisclosed repairs, it’s up to buyers to protect themselves. Fortunately, there are a few resources to help uncover a car’s history.

The National Motor Vehicle Title Information System helps consumers run background checks on cars. And the National Insurance Crime Bureau’s free service, VINCheck, allows drivers to check whether a car has been reported as a salvage vehicle by a participating insurance company.

But since some damage is never reported, these systems aren’t foolproof. A buyer’s best protection is to have a professional mechanic run a detailed inspection on any suspect vehicle.

Instead of buying from a private seller, consider working with a trusted company that thoroughly inspects its cars so you can be confident you’re buying a safe pre-owned vehicle.

And since you’ve spent all this time finding a great car, don’t just sign off on the first loan you come across. Put a little time into shopping around for the best rate on a car loan.

You can cut your costs even further by comparing offers to find the best rate on your auto insurance. Some simple comparison shopping could slash your monthly payments by as much as $1,000 a year.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.