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Experts warn about flood-damaged vehicles

Six years ago Salvatore and Theresa Cannella bought a used Oldsmobile they thought was a bargain. Soon it went bust.

"The brakes would go out," remembers Salvatore. "Something would go wrong with it."

The car, purchased in Virginia, had been flooded in North Carolina during Hurricane Floyd, one of an estimated 50,000 damaged vehicles that went into the used car market. This time, that number could top 250,000.

Carfax performs title searches, looking for ugly secrets like flood damage. Now, for the first time, it's working with government officials.

"We've added a FEMA disaster advisory alerting consumers to cars that were registered in the gulf," says Larry Gamache with Carfax.

But some states have title laws that con men can exploit to erase a car's history.

So Rik Paul of Consumer Reports says do some detective work on your own or with an independent mechanic.

"If it has a moldy or mildewy smell, that's a sure sign of water damage," he says.

You also want to search for water marks, especially in less obvious places. One tip: Lift up the car's trim and look for stains, discoloration or rust — anything that tells you it's been sitting in water.   

The real danger lies in what you can't see, like electrical systems that could short and safety devices, such as airbags, that could fail to work.

To prevent that, Progressive Insurance will crush some 4,000 vehicles recovered swamped by  E. coli- and fuel-tainted water in the New Orleans area, saying they are too contaminated for its workers to inspect and consumers to buy.