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Buyer Beware: Thousands of Flood-Damaged Cars Could Inundate Market

by Paul A. Eisenstein /  / Updated  / Source: The Detroit Bureau

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The storms that have swept across the middle of the U.S. in recent weeks have caused extensive damage and a number of deaths. And there's more potential danger: Perhaps 10,000 vehicles were seriously damaged or totaled in Texas alone, according to industry experts who worry that many of those could wind up back on the U.S. car market. Unsuspecting buyers may not realize the risks they face.

While flood-damaged vehicles can undergo cosmetic repairs, that often masks, rather than resolves, longer-term issues, such as rust, mold and mechanical problems that could plague buyers later on, experts warn.

"A car that's been in a flood, with the engine emerged for any length of time, will never be the same," Carl Sullivan, a veteran inspector for California-based Alliance Inspection Management, says.

The actual number of vehicles impacted by the flood is likely to be significantly higher than formally reported because many older models might not have relevant insurance coverage, notes the National Insurance Crime Bureau. Legally, any vehicle damaged or declared totaled due to flooding should have that clearly marked on their titles.

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Most of them will either be scrapped and recycled or they may be broken down for parts. "Unfortunately, some of the flooded vehicles may be purchased at bargain prices, cleaned up, and then taken out of state where the VIN (the unique Vehicle Identification Number) is switched and the car is retitled with no indication it has been damaged," noted the NICB in a warning statement.

Appropriately, the process is known as "title washing." Meanwhile, individuals with flood-damaged cars with no insurance coverage may simply repair the vehicles and put them on the market without disclosing that information.CarFax, a service that helps used car buyers validate title information and a vehicle's history, estimates that a large number of damaged vehicles routinely go back on the market.

Of the 75,000 cars, trucks and crossovers affected by 1999's Hurricane Floyd, for example, CarFax estimated half were eventually resold.

That's not necessarily illegal, as long as buyers are told of the damage. While a flood-damaged vehicle might undergo extensive repairs, experts stress that long-term issues could emerge. They point to rust in areas where water might have pooled. Electrical circuits, such as head and taillights are more prone to shorting out. And mold can develop in hidden places.

Experts warn that today's vehicles are particularly prone to long-term issues due to the extensive use of microcomputer systems for everything from engine controls to safety devices.

They offer several tips for shoppers:

  • Newly replaced upholstery or trunk liners may hint at flood repairs;*
  • Look for rust in places normally not prone to damage, such as upper door hinges and trunk latches;
  • Rust or mud under the gas and brake pedals;
  • Beads of water in places like a vehicle's dome light;
  • A musty or moldy smell;
  • Buyers should also make sure the VIN number on the dash matches the one on the vehicle's driver door jamb.

More from The Detroit Bureau:

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