Sun Sentinel Palm Beach Edition
Flooded vehicles may surface
Here are tips to avoid purchasing a lemon
“As with any purchase, if the deal seems too good to be true, your fraud radar should start sounding off.” Lynne McChristian, Insurance Information Institute
A flooded car — one of hundreds of thousands inundated during hurricanes Harvey or Irma — might be for sale on Craigslist or at a used car lot near you.
But unless you are mechanically inclined and enjoy solving electrical problems, chances are you’ll want to avoid buying it.
Consumer protection groups are warning buyers across the country to beware of cars that sustained heavy damage or were declared total losses by insurers. As always happens after flood events, a large number will be diverted from their trips to the scrap yard, sold to unscrupulous dealers at rock-bottom prices, dried out, cleaned up and put back on the retail marketplace, where they wait for buyers who don’t look carefully for signs of flooding.
“Sometimes a buyer gets lucky and can enjoy the deal,” said Lynne McChristian, Florida spokeswoman for the Insurance Information Institute, an industry supported organization. “But there are many things that can go wrong with engine components and mechanical parts.”
Not to mention electronic components. Dirt, silt and sewage typically found in floodwaters can wreak havoc on the circuit boards and wire harnesses found throughout today’s high-tech vehicles, creating an endless series of fits and failures, consumer advocates say.
While the exact number of cars ruined from floodwaters in Harvey and Irma isn’t known, Roger Morris, spokesman for the nonprofit National Insurance Crime Bureau, said flooding is to blame for the vast majority of vehicle damage reported to insurers after the storms.
So far, Harvey damaged about 350,000 insured vehicles while Irma’s toll stands at about 154,000, Morris said.
If those cars were on new car dealership lots, they were insured and likely disposed of properly if insurers declared them total losses. Fort Lauderdale-based AutoNation said after Harvey that thousands of cars at its dealerships in the Houston area would be scrapped.
Insurance adjusters have been busy in Florida and Texas inspecting flooded vehicles. Morris said he recently visited two salvage sites in Texas. “One site is maxed out at 35,000 vehicles and the other is at 23,000. There are many more locations.”
Insurers usually need 60 days to cycle through all of the claims, he said. “I’m told by the salvage operators that all the Texas cars are in, but Florida is still going.”
When inspecting cars, insurers look for signs of flooding around the axles that can affect the brakes, engine and electronics, Morris said. Many will have visible water lines denoting how deeply they were submerged.
While Louisiana law requires insured vehicles with severe flood damage to be crushed, no such requirement exists in Florida or Texas.
Flood-damaged cars can be resold in both states, but state law requires their titles be branded as flood damaged so buyers know what they are getting.
That’s not true everywhere, however, and flooddamaged cars from states without branding requirements can be resold in Florida with clean titles, according to the Florida Department of Highway Safety and Motor Vehicles.
Then there are the scammers.
McChristian said, “What has happened after floods is that some shady opportunists switch serial numbers or copy them off cars with a clean title to resell a damaged car. Then the vehicles are sold in a state that isn’t as strict about its titling practices.”
Carfax estimates as many as half of flood-damaged cars eventually return to the marketplace. Many didn’t have flood insurance to begin with, so no adjuster looked at them and no brand was added to their titles, Morris said.
“Unfortunately most cars are no longer covered for flood damage because the owner has chosen to drop the comprehensive coverage once the loan has been paid off,” Morris said. “So there’s noting to stop those cars from being cleaned up and resold on Craiglist, etc., with no indication they’ve been flooded.”
The best way to avoid buying a flood-damaged car is to buy from a reputable dealer, McChristian said. That might be more expensive than buying from a private owner, but “they’ll tell you the truth,” she said. “As with any purchase, if the deal seems too good to be true, your fraud radar should start sounding off.”
Here are some tips on how to avoid buying flood-damaged cars, from Consumer Reports and the Insurance Information Institute:
Start with your nose. If a car smells musty, that’s a likely sign it was exposed to water. A strong air freshener odor might mean the seller is trying to mask the smell of mildew. Check the carpet and upholstery.
Is it an older car with brand new carpet? That might be a warning sign.
Check for a water line or signs of caked-on mud. Mud can gather in places sellers might not think to clean, like inside the glove box, under carpeting, gaps between panels in the trunk or hard-toreach places under the hood.
Closely inspect headlights and taillights for water lines or condensation.
Check unpainted, exposed screws under the dashboard for signs of rust.
Look at the seat mounting screws for evidence they might have been removed to dry or replace the carpet.
Check the car’s Vehicle Identification Number [VIN] to see if the car has been branded as salvage-only. Vehicles are typically considered salvage when the damage is roughly 75 percent of the car’s value. For vehicles titled in Florida, consumers can check their VIN number at the Department of Highway Safety and Motor Vehicles website: services.flhsmv.gov/MVCheckWeb.
For vehicles titled in other states, the National Insurance Crime Bureau offers a free VIN check at: nicb.org/theft_and_fraud_awareness/vincheck
Have a trusted mechanic inspect the vehicle’s mechanical and electrical components, plus systems that contain fluids, for water contamination. A seller who balks at this request may have something to hide.