After hurricanes, beware of flooded cars for sale

The competition for new and used cars was already intense before Hurricane Ida destroyed thousands of vehicles. Now, not only can shoppers expect even higher prices, but they face another problem: storm-damaged vehicles making their way into the market.

If you’re buying a used car — especially one that shows up for sale within a few months of a major flood — be sure to take a close look. Your own eyes (and nose!) can help.

Signs experts say you should look for include water stains, mildew and sand or salt inside vehicles, under the carpets and in luggage and engine compartments. You may need to open access panels to see areas where water would have accumulated.

Of course, a mechanic’s inspection is always a good idea when buying a car, and if you suspect unreported flood damage, ask them to also look for that as part of their process.

But documentation can help, too. Experts advise using a service, such as Carfax, AutoCheck and VINCheck (offered for free by the National Insurance Crime Bureau) to check vehicles’ histories for red flags. CarFax’s free Flood Check reports whether a car has a flood or salvage title from the state DMV, was declared a total loss by the insurance company, or was reported as flooded by repair shops.

And Experian’s AutoCheck free flood risk check will show if the vehicle has been titled/registered 12 months prior in a county that has been identified as requiring public and individual assistance for a FEMA-declared major disaster.

These services aren’t foolproof. Flooded vehicles won’t show up in the databases if they weren’t fully insured, or if repairs were done without a claim being filed. Also, in a process called “title washing,” crooks take the autos to different states, switch the VINs and retitle the cars so the damage won’t show up in a search.

Most of the time, it’s against the law to pass off a flood-damaged vehicle to an unsuspecting buyer.

“Regulations vary by state. But in general, vehicles ‘totaled out’ by insurers because they have received a certain amount of damage are issued a salvage vehicle certificate, or salvage title,” says Tully Lehman, public affairs manager for the National Insurance Crime Bureau. “Some states take an additional step and add a title brand to the title for the reason why it was damaged. In other words, if damaged in flooding that would be marked as such in some states.”

But private sales aren’t as regulated, Lehman noted. “If purchasing a vehicle from a private seller, get everything in writing as you may have some recourse should anything turn out to be false.”

When purchasing a used car, you should always check the VIN to be sure it matches what you’re being told by the seller.

Elaine Silvestrini is associate personal finance editor for Kiplinger.com. For more on this and similar money topics, visit Kiplinger.com.