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Water Damaged Cars

They're baaack! Storm damaged cars return

Scam artists are try to unload vehicles damaged by Gulf Coast hurricanes in auctions elsewhere.

January 27, 2006; Posted: 1:53 p.m. EST (1853 GMT)

NEW YORK (CNNMoney.com) - Call it "Return of the Soggy Sedan" or "The Night of Waterlogged Wheels", but unlike a zombie flick, the horror of flooded vehicles returning to the used car market seems to be very real.

Over four months after hurricanes Katrina and Rita struck the Gulf Coast, scam artists are already trying to pawn off flooded vehicles as your standard secondhand car, according to industry experts.

< = =text/> "Consumers need to be aware that these cars will be hitting the market," said Chris Basso, a spokesperson for Carfax, a vehicle history tracking firm. "They could pop up anywhere."

Recently, swindlers tired to pawn off 14 flood-damaged cars at an auto auction in the Los Angeles, Carfax said.

And with the National Auto Dealers Association estimating that over 571,000 vehicles were damaged from Hurricane Katrina alone, similarly damaged goods are expected to start popping up in regions of the country where buyers aren't used to looking for flood damage.

While cleaning up flood-damaged cars and reselling them is by no means a new scam -- damaged cars were unloaded after Hurricane Ivan in 2004 and Hurricane Floyd in 1999 -- Basso said that in most cases hucksters will buy vehicles that should have been scrapped or sold for parts, cleaning them up and shipping them to another part of the country where they can alter the title and pass them off to unsuspecting buyers.

Such cars may look fine at first glance, but in many cases the safety and electronic systems can be compromised.

To avoid buying one of these nightmares, Carfax recommends looking for standing water in the spare tire wheel well or rust around the engine compartment as well as having a mechanic look it over and, of course, ordering a report of the vehicle's history. That can let you know if the car was titled as "salvage" in another state, even though the current title may not indicate that.

For more tips on how to make sure you aren't buying a water damaged car, click here.

Used cars could hide storm damage

'Title-washing' is one way crooks pass off flooded or otherwise ruined cars as nearly new.

October 11, 2005; Posted: 10:01 a.m. EDT (1401 GMT)

By Peter Valdes-Dapena, CNN/Money staff writer
NEW YORK (CNN/Money) - It looks like a bargain. A practically new car with very few miles on it for thousands less than its original sticker price.

But there's something hidden in the vehicle's past. Something very, very wet.

< = =text/> Some fresh upholstery and new carpeting could be covering up a brush with a hurricane. When a hurricane like Katrina or Rita tears through a huge swath of American real estate, it smashes up a few auto dealerships along the way. In the process, it dumps gallons on a whole lot of cars.

The National Automobile Dealer's Association recently warned consumers that large numbers of flood-damaged cars could be entering the used car market.

Flood damaged cars should never be sold as "used cars," though. Insurance companies pay for the damage and those cars are usually sold for salvage. At the state department of motor vehicles, the car's paperwork gets a "SALVAGE" stamp, and data on the loss is entered into the state's database.

But when you buy the car, you may not see any of that. In fact, the car's title may not even be from the state where the damage happened. That's one way unscrupulous used car sellers can hide the fact that a car has suffered major damage.

Different states define terms like "Salvage" or "Totaled" differently.

Let's say, for example, one state, defines "totaled" as damage equivalent to or greater than 60 percent of the car's total value. If someone buys a "totaled" car in that state, takes it away on a flat-bed tow truck and registers it in another state where "totaled" is defined as damage equivalent to the car's full retail value....

Hey, it's not totaled there, now is it?

That means that no record of the damage needs to be made on the car's new state records. Some body work or new upholstery could easily cover up obvious signs of damage. Less obvious damage would still be there, though, and could cause you serious problems later.

Water damage from flooding effects just about everything in car. Electrical components are particularly vulnerable to water damage, said Auto appraiser Larry Batton of the Auto Appraisal group in Charlottesville, Va.

So what should you do to avoid getting stuck driving a car that should have been sold for salvage?

First, get a vehicle history report.

Vehicle history reports, like those from Experian Automotive and CarFax won't tell you everything about a car's history -- for example, they won't tell you about minor accidents or even major accidents in some states -- they should tell you if a car has ever been tagged as "salvage" or "flood damaged" in any state.

These companies search an enormous database of DMV records from all 50 states, Washington, D.C., and Canada. They provide potential buyers with a sort of life history of a car, showing where it was registered, to whom, its mileage and other important notes.

Don't leave it at that, though. For one thing, there's always the slight possibility that someone may have moved quickly enough to fix up and sell a car before record of its damage entered vehicle history report companies' databases. If the state the car's registered in doesn't show up in the vehicle history report, that should raise a warning flag, though

Use your eyes or, better yet, hire a professional set of eyes to thoroughly inspect the car.

Actually a nose might be more important. A musty or moldy smell inside the car can be a giveaway that the car has suffered flood damage, said Batton.

Other things to look for include signs that the dashboard has been removed and open drainage holes in the bottom of the vehicle, he said.

You should also be suspicious of recently shampooed carpets and check for mud or grit in and around components under the hood, advises NADA.