Buyer beware: All those cars damaged in floods could be coming to a dealer near you
LOS ANGELES — It’s the smell that’ll give it away.
“You had better get your face close to carpet,” urged Ivan Drury of Edmunds, the automotive information service. Now take a whiff. “That gross, musty smell,” said Drury, “that’s a big red flag.”
It means the vehicle most probably has been in a flood. Soon, these may be the perils of shopping for a used car in California.
That’s because hundreds, if not thousands, of vehicles were inundated during the series of rainstorms that ripped through much of the state in January. They generated the sort of flooding that can wreak havoc on automobiles — think: rusty floorboards, water-logged electronics and inoperable engines.
In the days and weeks ahead, a complex ecosystem of insurance companies, auction houses, car dealers and others will process these soggy automotive casualties.
Many will eventually wind up for sale again. And at least some of those rides will be risky buys.
Kenneth Potiker, owner of Riteway Auto Dismantlers, knows what advice he’d give to people considering the purchase of such a vehicle.
“I would tell them not to buy a car like that — that would be the best advice,” said Potiker, whose San Bernardino company sells used auto parts. “If it floods inside a car, water damage is one of the worst types of damage.”
Many flooded vehicles will be totaled by insurance companies — this is generally done when the cost of the necessary repair work is equal to or more than the value of the vehicle. These cars will be retitled via the California Department of Motor Vehicles with “salvage,” or “junk” designations, which alert consumers to their past damage or other issues. Then, a large number will be unloaded at auctions conducted by companies such as Copart and Insurance Auto Auctions, based in Dallas and Westchester, Ill., respectively.
A host of bidders will compete for the drowned derelicts — some of whom may have less than honest intentions for the reselling of the rides. And that matters, because cars that have suffered water damage could be perilously unsafe, both physically and technologically, even if they don’t look that way, said Drury, director of insights for Edmunds.
“Number one, your electrical system: you’ve got so much electronics on a car, now more so than ever. Technology systems prevent you from getting into an accident, and now you are in more danger,” he said. “And there’s the vehicle physically deteriorating over time.”
Following Hurricane Ian’s devastating assault on Florida and neighboring states in September, Carfax, the vehicle data firm, warned consumers of the risks of buying used cars with water damage.
The company also estimated that flooding brought on by the hurricane may have damaged as many as 358,000 vehicles.
“We are seeing these flooded cars show up all around the country, putting unsuspecting buyers at risk,” Emilie Voss, a spokeswoman for Carfax, said in a statement in October. “Cosmetically these cars might look great, but if you don’t know what to look for, it’s nearly impossible to tell they are literally rotting from the inside out.”
Before the hurricane, Carfax estimated that in 2022 there were about 400,000 vehicles on the road with flood damage in their history, Voss said in a statement to The Times.
An eclectic group of buyers are likely to compete for vehicles damaged in California’s January storms. Many cars will be acquired at auction by entrepreneurs and shipped overseas, where they could be resold. Some will be purchased by dealers who will recondition them and sell them as used cars. There are those that will be purchased by private-party buyers, who are able to bid at certain auctions. And others will be bought by dismantling operations that will strip the vehicles for parts and resell their usable remnants.
Potiker is one such businessman, and he expects to see the flooded cars popping up at auctions in about a month. But he does not plan to be a major bidder.
“I’ll buy a few, I’m sure — but I stay away from a lot,” he said, explaining that it can be difficult to tell the extent of damage before bidding. There’s also competition from bidders with overseas interests who will often pay more than he’s willing to bid.
Racer Yoemans has a similar perspective. He’s president of salvage-parts data software company BidCall, which is headquartered in Seguin, Texas, and he also deals used parts.
“To be perfectly honest with you,” he said, “I don’t buy flood vehicles.”