Buying & Leasing a Car

After Storms, Beware of Flooded Cars for Sale

There's a chance the used car you have your eye on could have been damaged. Here’s what to watch out for.

Whether it's a hurricane, a storm cyclone, a Nor'easter or just a torrential rain, the aftermath frequently  includes water-damaged cars—sometimes hundreds of thousands of vehicles destroyed. 

Hurricane Ida alone caused water damage to 212,000 cars, according to an estimate from CarFax. And Ida was far from unique. That storm and others that followed wreaked destruction during what was already a period of intense competition for new and used cars at a time with historically low inventories.

Industry analysts feared a worsening of supply issues. “With flooded vehicles probably needing to be scrapped we’ll likely see an exacerbated inventory shortage along Ida’s path, particularly in the Gulf and Northeast, which could further increase prices above already high levels,” said Kevin Roberts, director of industry insights and analytics for CarGurus.

Experts warn consumers shopping for used cars to be wary of the possibility of storm-damaged vehicles making their way into that tight market.

Hiding flood damage is against the law

When cars are flooded, the bodies can rust prematurely, wiring can become brittle, and both electrical and mechanical systems can be affected. If there’s enough damage, insurance companies will declare them total losses and pay claims for the value.

Cars that are declared to be total losses are usually retitled with their state’s department of motor vehicles, and the new titles will disclose that the vehicles have been flood-damaged.

In many cases, those cars will be sold to companies that dismantle them and resell usable parts. But sometimes people try to sell these cars without revealing the flood damage, which could create big risks for the buyers.

Tully Lehman, public affairs manager for the National Insurance Crime Bureau, said to expect people with storm-damaged cars who don’t have comprehensive-coverage insurance that covers flooding to try to clean up damaged cars and sell them to unsuspecting buyers.

“Unfortunately, following major hurricanes or flooding events, we see fraudsters try to scam consumers by selling cars damaged in the flooding,” Lehman said.

How to avoid buying a flood-damaged car

If you’re buying a used car—especially one a few months after a major flooding event—be sure to take a close look. Your own eyes (and nose!) can help. Signs experts say you should look for include water stains, mildew and sand or salt inside vehicles, under the carpets and in luggage and engine compartments. You may need to open access panels to see areas where water would have accumulated. Of course, a mechanic’s inspection is always a good idea when buying a car, and if you suspect unreported flood damage, ask them to look for that as well as part of their process.

But documentation can help, too. Experts also advise using a service, such as CarFax, AutoCheck and VINCheck (offered for free by the National Insurance Crime Bureau) to check vehicles’ histories for red flags. CarFax’s free Flood Check reports whether a car has a flood or salvage title from the state DMV, was declared a total loss by the insurance company, or was reported as flooded by repair shops. And Experian’s AutoCheck’s free flood risk check will show if the vehicle has been titled/registered 12 months prior in a county that has been identified as requiring public and individual assistance (FEMA categories A and B) for a FEMA-declared major disaster.

These services aren’t foolproof. Flooded vehicles won’t show up in the databases if they weren’t fully insured, or if repairs were done without a claim being filed.. Also, sometimes crooks take the autos to different states, switch the VINs and retitle the cars, so the damage won’t show up in a search, in a process called title washing.

Most of the time, Lehman noted, it’s against the law to pass off a flood-damaged vehicle to an unsuspecting buyer. “Regulations vary by state, but in general vehicles ’totaled out’ by insurers because they have received a certain amount of damage are issued a salvage vehicle certificate, or salvage title,” Lehman said. “Some states take an additional step and add a title brand to the title for the reason why it was damaged. In other words, if damaged in flooding that would be marked as such in some states.”

But private sales aren’t as regulated, Lehman noted. “A private seller is not supposed to lie. If purchasing a vehicle from a private seller, get everything in writing as you may have some recourse should anything turn out to be false.”

When purchasing a used car, you should always check the VIN to be sure it matches what you’re being told by the seller. 

For example, a VIN can provide vehicle history, but also make, model, year, color and engine. So alarm bells should sound if you’re told the car you’re buying is a blue 2006 Honda Accord, but when you look up the VIN it says it’s a 2004 or that its color is black.

“It could be an honest mistake by the seller, or perhaps not,” Lehman said. “In this case, best to walk away.”

 

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 12 Best Tech Stocks to Buy for 2022
tech stocks

The 12 Best Tech Stocks to Buy for 2022

The best tech-sector picks for the year to come include plays on some of the most exciting emergent technologies, as well as several old-guard mega-ca…
January 3, 2022
How to Know When You Can Retire
retirement

How to Know When You Can Retire

You’ve scrimped and saved, but are you really ready to retire? Here are some helpful calculations that could help you decide whether you can actually …
January 5, 2022

Recommended

Time to Reshop Your Home and Auto Insurance
Making Your Money Last

Time to Reshop Your Home and Auto Insurance

Comparing prices on policies and bundling your coverage may save you money.
December 22, 2021
Kiplinger’s Best Firms for Customer Service: Banks, Credit Cards and More
banking

Kiplinger’s Best Firms for Customer Service: Banks, Credit Cards and More

We evaluated major banks, credit card issuers, mortgage lenders, and home and auto insurers to see how well they treat their clients.
December 21, 2021
How to File Tornado Insurance Claims
insurance

How to File Tornado Insurance Claims

The five-state storms caused billions in damages. If you were affected, make sure you document your losses and contact your insurer immediately.
December 14, 2021
Scammers Target Last-minute Shoppers
Scams

Scammers Target Last-minute Shoppers

Products may be in short supply, but potential thieves are not. Be “scam smart” to keep your holiday happy.
December 14, 2021