Personal Finance

Flood-damaged cars could reach the market. Here’s how to avoid buying one

Key Points
  • At least several thousand used cars available for resale have likely been flooded during recent storms such as Hurricane Ida.
  • Some of them will end up being sold without the damage being disclosed, whether by a private seller or an unscrupulous dealer.
  • Roughly 378,000 flood-damaged cars already were on the roads before Ida hit.
Floodwater surrounds vehicles following heavy rain on an expressway in Brooklyn, New York.
Ed Jones | AFP | Getty Images

Anyone who considers buying a used car in the upcoming months may want to be extra-cautious.

As storm-ravaged areas take stock of the destruction left by Hurricane Ida, thousands of flooded cars are expected to be among the personal property that was ruined. While cars with flood damage may have titles that indicate that, the system is not foolproof — which means some of these autos are likely to be purchased by unknowing buyers.

"Unfortunately, following major hurricanes or flooding events, we see fraudsters try to scam consumers by selling cars damaged in the flooding," said Tully Lehman, public affairs manager for the National Insurance Crime Bureau.

Compounding the potential for fraud this time around is the high demand for used cars as the global shortage of microchips continues slowing production of new vehicles. That demand could create an opportunity for scammers to take advantage of buyers' eagerness to seal a deal, experts said.

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Ida slammed into Louisiana on Aug. 29 and then moved inland, eventually crossing over the mid-Atlantic and Northeast. The storm left a trail of devastation in its wake from deadly flooding, high winds, storm surge and tornadoes. That was on the heels of two other large storms that dumped torrential downpours in the Southeast and Northeast.

A teenager cleans water out from a car in a flooded Queens neighborhood that saw massive flooding and numerous deaths following a night of heavy wind and rain from the remnants of Hurricane Ida on September 03, 2021 in New York City.
Spencer Platt | Getty Images

Roughly 378,000 flood-damaged cars already were on the roads before Ida hit, according to Carfax spokesman Chris Basso. 

"If history holds true, we're looking at several thousand more [flooded] vehicles, and a decent percentage of them will make it back into the market," Basso said.

Floodwaters can destroy — sometimes slowly — electronics, lubricants, and mechanical systems in vehicles. Corrosion can eventually find its way to the car's vital electronics, including airbag controllers, according to ConsumerReports.

Car inventories hit record low
Car inventories hit record low

Buyers should always check a used car's "vehicle history report" to make sure they know what they are buying, regardless of when or where they make the purchase. Flooded cars often end up for sale in places far from where they originally were damaged.

Through services like Carfax or the National Insurance Crime Bureau's VINCheck, you can input a car's vehicle identification number, or VIN, to see if there's anything in its history that's a red flag. However, you may not be able to find out everything. 

Basically, when an insurance company receives a claim for a flooded car and the vehicle is totaled — meaning the repairs would cost more than the car's worth — the car's title generally is changed to reflect its status.

Cars sit abandoned on the flooded Major Deegan Expressway following a night of extremely heavy rain from the remnants of Hurricane Ida on September 2, 2021 in the Bronx borough of New York City.
Spencer Platt | Getty Images

Those ruined cars are typically sold at salvage auctions to junkyards and vehicle rebuilders, according to ConsumerReports. Reselling them to consumers may be legal if the title discloses the flood damage.

Unfortunately, following major hurricanes or flooding events, we see fraudsters try to scam consumers by selling cars damaged in the flooding.
Tully Lehman
Public affairs manager for the National Insurance Crime Bureau

However, not all car owners file an insurance claim. If they don't have comprehensive coverage — the part of car insurance that flooding would fall under — they're generally out of luck. This means that with no insurance company involvement, the flood damage may not end up officially recorded anywhere. 

"Unfortunately, there will be those that, due to not having insurance coverage for flood damage, will attempt to clean their car and try to sell it to unsuspecting buyers at some point in time down the road," Lehman said.

And, there are some dealers that will clean up flooded cars and sell them, whether locally or in another state where titling rules are less stringent.

"This makes checking out cars closely, even on lots, very critical," Lehman said.

There are things you can look for in a used vehicle for that could suggest flood damage, according to Carfax:

  • A musty odor in the interior, which sellers sometimes try to cover with a strong air-freshener;
  • Upholstery or carpeting that may be loose, new or stained or doesn't seem to match the rest of the interior;
  • Damp carpets;
  • Rust around doors, under the dashboard, on the pedals or inside the hood and trunk latches;
  • Mud or silt in the glove compartment or under the seats;
  • Brittle wires under the dashboard;
  • Fog or moisture beads in the interior lights, exterior lights or instrument panel.

You also should test drive the car and have it inspected by a trusted mechanic.

"And remember, if the price seems too good to be true, it likely is," Lehman said. "Trust your instincts and if you have a bad feeling, go elsewhere."