Action Line: be aware of flood-damaged cars on the resale market

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A river overflows its banks in Northern Nova Scotia.

Excessive flooding can result in extensive damage to cars.  Cars may look okay to the inexperienced eye but have serious problems that require experts to uncover.  Water can damage electronics and mechanical systems, sometimes immediately but other times as a result of corrosion that does not become evident for months or even years. 

This fact does not stop dishonest businesses from transporting water-damaged cars to locations far away from where the flooding occurred and selling them to unsuspecting consumers.  In fact, an online search for “selling flooded cars” yields plenty of firms happy to buy them and, we can assume, resell them elsewhere.  The National Insurance Crime Bureau, which works with insurance companies, law enforcement agencies, and consumers to fight insurance fraud and theft, recently sent out a warning that cars damaged by Hurricane Barry will soon start appearing around the country.  Such alerts are not new: Consumer Reports sent out a similar notice a year ago after the catastrophic Northeast and Mid-Atlantic floods.

When a car is considered a loss due to flooding, it is supposed to get a new title, called a “salvage title.”  These cars can be sold at auctions and repaired, but cannot be registered unless passing an official inspection, at which point they get a “rebuilt” title.  While the majority of those refurbished vehicles are sold with full disclosure of the damage, shady businesses will engage in “title washing,” when cars that have been totaled (or stolen) get clean, new titles in states with lax regulations as long as sellers can make them look undamaged.  In addition, if the vehicle’s owner did not have comprehensive insurance coverage at the time of the flooding, or the repair bill did not exceed a certain level, the vehicle might not get a salvage or branded title at all.

There are online information banks that consumers can use to protect themselves from purchasing previously-flooded cars.  The National Motor Vehicle Title Information System can help consumers run background checks.  The National Insurance Crime Bureau offers a free VIN-check service.   Carfax is a third trusted source for examining a car’s history.

Consumer Reports provides the following list of actions that used car buyers can perform if they suspect a used car that they are examining has suffered flood damage:

·      Inspect the carpets to see whether they show signs of having been waterlogged, such as smelling musty or having caked-on mud. Brand-new carpets in an older vehicle may be another red flag.

·      Check the seat-mounting screws to see whether there’s any evidence that they were removed. To dry the carpets effectively, the seats must be removed and possibly even replaced.

·      Inspect the lights. A visible waterline may still show on the lens or reflector.

·      Inspect the difficult-to-clean places, such as gaps between panels in the trunk and under the hood, for mud and debris.

·      Look on the bottom edges of brackets or panels, where grime wouldn’t settle usually.

·      Look at the heads of any unpainted, exposed screws under the dashboard. Bare metal will show signs of rust in flooded cars.

·      Check to see whether the rubber drain plugs under the car and on the bottom of doors look as if they have been removed recently. That may have been done to drain floodwater.

A more complete list of actions can be found here.

Whenever thinking about buying a used car, consumers should:

·      Never trust what the seller says about the condition of any used car.

·      Never buy a used car unless it has a title (although that alone will not protect you).

·      Always have a reputable repair shop inspect a used car before committing to its purchase.

Finally, if you live in an area that has suffered from a serious flood and want to sell your undamaged car, expect potential buyers to be suspicious about its condition.  Be sure to have evidence that a mechanic has inspected the car and has verified that it is in good condition.

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