Avoid Buying a Flood-Damaged Used Car/ November 6th, 2012
With hurricanes and other big rain storms causing serious flooding across the East coast, a potential issue arises for used-car buyers even if they live nowhere near a flood. If you are a used-car buyer, be careful not to buy a car that has been flooded.
After 2011's Hurricane Irene, the National Insurance Crime Bureau (NICB), Des Plaines, Ill., calculated from its insurance company members that nearly 11,800 claims were filed for auto damage from flooding. Unscrupulous car wholesalers often will ship flooded cars to another state where they hope to avoid admitting the cars have been in a flood. This happened after Hurricane Katrina in 2005, which damaged 600,000 cars along the Gulf Coast, and again in 2011. Flooding can harm a car's electronic, mechanical, or other systems with potentially dire consequences like disabling air bags. It may affect the interior lights, the audio system, or the climate control. But much of this damage is not obvious in a cursory inspection once the car has been cleaned up. "People who fraudulently traffic in flood vehicles are good at cleaning them up and presenting them as perfectly fine used vehicles," warns the NICB. "To entice buyers even more, they are priced well below retail." So if you see a car selling sharply below comparable vehicles in the ads on a website like AutoTrader.com, be wary about why it seems such a good deal. Many states, but not all, require any car that has been flooded to have that fact stamped on its title to warn future buyers. Some states tag the title of any car that has been submerged in water, while others only do it if an insurance company has paid a total loss flooding claim. The title might be "branded" with the words salvage, flood, or both. Other state titles might not be labeled that clearly but have a number code to indicate a car has been flooded. To see what the title rules are in your state, check this list from the American Association of Motor Vehicle Administrators, Arlington, Va.
Photo courtesy of Flickr user ChefMattRock
Photo courtesy of Flickr user ChefMattRock
Look for physical warning signs that a car might have been flooded.Wholesalers often will take flooded cars to a state that doesn't require flood labeling and get a new title, a practice known as "title washing." The problem can arise not only with shady used-car dealers but also with individuals selling a car, perhaps with a made-up story about its history. To make sure you don't fall victim to such a scam, here's what to do if you are shopping for a used car:
Check government and noncommercial sourcesThe National Motor Vehicle Title Information System, Washington, D.C., overseen by the Justice Department, collects data from all states about vehicles that have been declared a total loss or have had their titles "branded" otherwise, including for flooding. Costs range from $2.99 to $6.99 for each vehicle you check. The National Insurance Crime Bureau provides a free check by vehicle identification number (VIN) based on data provided by its member insurance companies that will flag a car if it has ever been declared a total loss from flooding or other damage.
If you think you might buy a particular car but still are concerned, hire a professional to check it out.
Check commercial vehicle history servicesIf no problems show up on those databases, check with Carfax and its chief competitor AutoCheck, which get reports from insurers, police departments, and other sources about accidents and disasters, including flooding. If you are considering buying from a dealership, the salespeople may be able to show you these reports for the cars you are looking at. And free Carfax reports are available through agreements with car-selling websites such as AutoTrader.com and Cars.com. Otherwise, it costs $34.99 from Carfax and $29.99 from AutoCheck for a single vehicle report. For multiple reports, Carfax charges $44.99 for five, while AutoCheck will give you unlimited reports for 30 days at $49.99. Consumer Reports suggests checking all these services; it found that one of them can pick up a flooding or other problem where competitors have not.
Check the vehicleIn addition to checking a car's history, look for physical warning signs cited by the National Insurance Crime Bureau and Carfax that a car might have been flooded. Check them when you are looking at the car:
- Lift up an edge of floor carpeting to see if it is wet or muddy. Look for sand, silt, or mildew under the floor mats and carpets.
Flooding can harm a car's electronic, mechanical, or other systems.
- Check for hard-to-clean spots in the trunk and under the hood to see if small pieces of mud or debris might be clinging there. Look at the compartment holding the spare tire for mud or grit.
- Check to make sure that the audio speakers in the door are working. They often will be damaged in flooding.
- Inspect the headlights. If they have not been replaced, they might still show a water line.
- Look at any exposed screws under the dashboard for signs of rust.