Beware the flood of flood cars
A record number of cars have been affected by recent hurricanes. The National Automobile Dealers Association estimates that Hurricane Katrina alone may have damaged as many as 400,000 cars. Unfortunately, many of those vehicles may be finding their way to a used-car lot near you. That means that many car buyers may unknowingly buy a vehicle that has hidden water-related problems.
Flood damage may be hard to spot, but it can permeate the vehicle and cause ongoing problems for the rest of the car's service life. Flood damage can ruin electronics, contaminate lubricants, and threaten mechanical systems, often without leaving outward signs. It can take months for incipient corrosion to find its way to the car's computer systems or air-bag controllers.
Mold and mildew is another major problem. Even after soggy seats and carpets dry out, the lingering smell may never go away completely.
Most flood-damaged vehicles will be written off by insurance companies. Once it's declared a total loss, a car is supposed to get a new title, called a salvage title. Such titles, depending on the state, are usually either plainly marked or "branded" with the word "salvage" or "flood," or obscurely marked, with a coded letter or number. They are then typically sold at a "salvage" auction to junkyards and vehicle rebuilders, who may resell them. This practice is legal, as long as the flood damage is disclosed to buyers on the title, say experts at Carfax.com, a Web site that tracks vehicle histories and sells reports to consumers online.
But some flood-damaged vehicles will make their way back onto the used-car market, rebuilt and disguised as ordinary used cars with clean titles. State Farm Insurance recently settled a $40 million lawsuit after it was disclosed that the insurer had dumped almost 30,000 totaled cars at auction without retitling them as salvage vehicles. In addition, local mechanics who buy vehicles privately and resell them might not generate a paper trail indicating that a vehicle has been flooded. Some cars may not even have a title, so be wary.
"We'd be naïve to think that the system can handle (this many cars)," says Larry Gamache, a spokesman for Carfax. For now, Carfax reports include an alert notifying consumers of any car that was last registered in an area declared a flood-emergency zone by the Federal Emergency Management Agency.
Reports are available online at www.carfax.com or from Experian at ww.autocheck.com for $19.99. Such vehicle-history reports can alert you to some types of problems, but they are no guarantee that a vehicle has no hidden problems. That's why it is important to get any used car inspected by a trusted independent mechanic before you buy it.
Fortunately, cars damaged by the New Orleans floods should be easier to spot than other flood-damaged cars, says Paul Taylor, a spokesman for the National Automobile Dealers Association. The brackish water from Lake Pontchartrain, which flooded New Orleans, will cause rust very quickly.
How to spot a flood-damaged car
Here are some quick checks that you can perform yourself: