How to avoid used cars with flood damage

Oct. 14, 2021

By Jacob van Cleef, Consumer Watchdog Associate

This year is bringing us devastating flooding in different parts of the country. Unfortunately, flooding is occurring more often with the increase in big storms and hurricanes caused by global warming. Just last week, a storm carrying torrential rains caused flash flooding in northern Alabama after up to seven inches of rain fell in a few hours.

Flooding threatens people’s safety and brings immediate damage to homes and buildings. Once the flood waters recede, there are other consequences: Lots and lots of cars with flood damage.

Carfax Inc., which tracks vehicle histories on used cars and trucks and sells reports to consumers in the United States and Canada, estimates that 212,000 cars were damaged by Hurricane Ida in late August and early September. Flooding occurred from Louisiana all the way up through New York.

It’s unknown how many of these cars or others damaged by recent flooding may end up for sale from private owners or on car lots. But the National Insurance Crime Bureau (NICB) last month said it’s not unusual for unethical dealers and dishonest individuals to take damaged cars, clean them up and try to sell them. 

The current shortage of used cars on the market -- and correlated increased prices -- could make consumers more desperate and vulnerable to falling for a bad deal.

But superficial cleaning doesn’t remove the problems. When looking to buy a car, you want to avoid ones damaged by floods. Flooding causes long-term damage to different parts of the car, including the engine. That will lead to hefty costs of maintenance to keep the car going. Those cars should just be sold at salvage auctions for the parts not ruined by flood waters. Parts such as engines and brakes can be permanently damaged by flooding.

If a vehicle sustains serious flood damage and it’s covered by comprehensive insurance, the insurance company will generally reimburse the owner for the value before the car was flooded (after paying off any loan). The insurance company then will take ownership of the car, issue a salvage title and sell it to a salvage buyer. Salvage titles are normally given to cars damaged so severely that they lost more than 75 percent of the original value

A salvage title stays with the car unless it’s rebuilt and passes state inspection to get a rebuilt or reconstructed title. Insurance companies treat the car as a complete loss, so owners usually aren’t able to get repairs covered in any future accident if the car is classified as a salvage.  There are some exceptions though, according to Justin Tomczak, spokesman for State Farm, the nation’s largest auto insurer. “A salvage vehicle may still qualify for insurance coverage as long as it meets all of our eligibility requirements,” he said.

If a flooded vehicle isn’t insured and it’s still driveable, a dishonest owner could try to sell it with the existing regular title to an unsuspecting buyer. According to Tomczak, State Farm officials “do not ask about prior damage when a customer is submitting an application for insurance.” 

Even though they tend to be cheaper, you should avoid buying cars with salvage or rebuilt titles. They could cost a lot more in the long run. Sometimes, sellers will try to change the title fraudulently or not point out  the title is designated as salvage or rebuilt. 

Buyers can take steps to avoid buying a flood-damaged car:
  • Look up the Vehicle Identification Number (VIN). You can get it from the seller. If you look at the car in person, it will be engraved on a plate on the dashboard. You can do a basic check of the car’s history through the National Insurance Crime Bureau’s VINCheck. Carfax also offers a free flood check of the car’s VIN.

  • Have the car inspected by a professional you trust before buying it. 

  • Inspect the car yourself. You are not a professional, but there are some telltale signs of flood damage that might tip you off before you pay for a professional inspection. 

What to look for when inspecting a car for flood damage:
  1. Make sure the VIN on the dashboard matches what you were given.

  2. Smell for mold. Be suspicious if there’s an air freshener in the car, and see whether you can smell anything musty or earthy in nature. Some compare the smell of mold to that of sweaty socks.

  3. Check under the rugs and seats for anything unusual, such as water stains or sand.

  4. Look at any exposed metal such as uncovered screws. Make sure that the metal is not rusting. Also, peel back the rubber casings around electrical and mechanical connections, the NICB says. Materials containing iron may show signs of rust; materials containing copper may show a green residue; materials containing aluminum and alloys may show a white powder, the NICB says. 

  5. Look for signs of moisture buildup in the headlights.

  6. See whether there is a visible waterline left inside from when the flood water.

  7. On the flipside, the used car should not look like it is filled with new and clean parts. If you see that everything you check is brand new in this used car, you should check with the seller why they just replaced so much. Even if the car was cleaned heavily, the flood damage that you can’t see likely still exists, so the car should not be purchased.

  8. Buy from a trusted dealer, the NICB says. If you’re dealing with a private seller and get a bad vibe, walk away.

  9. Lastly, drive the car and see how it feels. Trust your instincts if the car feels weird to you in the way it accelerates, brakes or drives overall.

We all hope people selling cars damaged by flooding or anything else will be upfront with the history of the car, but that won’t necessarily be the case.