With the recent floods in Texas, Oklahoma and other states, consumers looking to purchase a used car—even in the Pacific Northwest and Alaska—should be wary. Scammers and unscrupulous car dealers often ship these damaged vehicles to other states to sell to unsuspecting buyers after natural disasters such as hurricanes and floods. The National Insurance Crime Bureau (NICB) estimates up to 10,000 insured vehicles in Texas had water damage from the May 2015 floods.
Flood-damaged vehicles that have been declared a total loss by an insurance company will have “salvage” stamped on the title. Most of these vehicles are then sold to parts companies who will sell the useable parts.
But scammers get around that by title washing: transferring ownership and retitling the autos in several states where they often “lose” the salvage stamp in the process. Other flooded vehicles may not have gone through the insurance claim process. They were purchased at bargain prices and taken to another state by unscrupulous sellers, so a title search will not indicate the car may have water damage.
These cars will show up on used car lots, in the classifieds ads in newspapers, on street corners with “For Sale” signs and online at sites such as Craigslist. Because these natural disasters happened in another part of the country, it may not be on a local car buyer’s radar to look for water damage. Flooded vehicles can be cleaned up to disguise the water damage while they are actually rotting on the inside. The car’s electrical, mechanical and computer systems can be corroded and rusting, and the lubricants may be contaminated.
“Approach a used vehicle thinking it has been flooded and look for signs to prove it,” says Frank Scafidi, Director of Public Affairs for the NICB. “If you don’t find water damage, great. If you do, don’t walk, but run from buying it.”
You can protect yourself from buying a flood-damaged vehicle by doing your research first. Remember: if the deal sounds too good to be true, it probably is. Do a title search through a national tracking company such as Carfax. Review the title and ownership papers for damage labels. Check the date and place of the vehicle transfer to see if it came from a flood-damaged area. And always have a trusted mechanic inspect a used car before you buy it, and ask to have the vehicle searched for flood damage that would not be visible.
Test drive the vehicle but also look for other telltale signs of possible water damage:
- Is there a musty odor?
- Check the wires under the dashboard. Are they flexible or are they brittle or cracked? This is a sign the car may have been submerged in water.
- Are there any signs of rust?
- Check all carpeting, including in the trunk. Check the condition under the carpet for signs of sand or dirt. Has the carpeting been changed? Is it too loose or not the same color as the interior of the car?
- Check the glove compartment and beneath the seats.
- Test everything in the car. Turn on the ignition to see if all lights and gauges come on (including the air bag lights); test the windshield wipers, turn signals, radio, air-conditioner and heater.
- Remove a door panel and look for water marks. Check the door speakers, as they will often show damage from flooding.
- Check under the hood for mud, grass, leaves or rust in the engine.
Better Business Bureau urges consumers to be cautious when purchasing a used vehicle. Do your research at bbb.org and make the investment to have the car inspected by a trusted mechanic.