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Scam Alert

Beware Flood-Damaged Cars

Water-soaked lemons are often cleaned up and resold — with no word about their soggy past

In the months following natural disasters that involve widespread flooding, car buyers across the United States risk getting soaked — with water-damaged lemons.

See also: Protect your valuables in a storm.

How to avoid buying flood damaged cars

Can you spot a flood-damaged car? — Photo by Rich Iwasaki/Getty Images

Each year, about half of the vehicles savaged by floods and hurricanes wind up on used car lots across the country. That can amount to tens of thousands in a typical year, and as many as 600,000 following a major hurricane such as Katrina.

How do these "flood cars" get to lots that are often thousands of miles from the devastated area? In the typical scenario, a car sits water-soaked for a couple of days, insurers declare it a total loss, pay off the owner, and the vehicle is hauled to a salvage yard where it's supposed to be sold for spare parts.

But unscrupulous vendors may buy it for a song at auction, clean it up, and sell it to car dealer or individual buyer. Usually the vehicle is "sold out of state, where it's easier to obtain titles without disclosing the water damage," notes Christopher Basso of CARFAX, a vehicle tracking service. (It's legal to resell a water-damaged car, but not without disclosing its history.)

When a flood car reaches the lot, it may be drivable. But weeks or months later, you can expect problems. Rust attacks the engine and body. Wires that were water-soaked dry up and crack. Brakes, door locks, power windows, transmission and heating and air conditioning units fail.

Or worse. Just three weeks after one AARP member unknowingly purchased a flood car, "it literally exploded while my son was driving, spewing hunks of engine block and oil all over," she says. "He's lucky he wasn't killed."

Although that used Pontiac was later discovered to have been declared unsalvageable by an insurance adjuster, it was sold at auction and moved to Pennsylvania. It was issued a new title with no indication of its soggy past, despite requirements for such disclosures on state vehicle records.

Whenever you're thinking of buying a used car, it's wise to have a trusted mechanic inspect it — away from the dealer's lot. But to guard against flood cars in particular, you can engage in some do-it-yourself sleuthing as well.

Next: How to spot a flood car. >>

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