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How to not get tricked into buying a car with water damage

MICHAEL SPOONEYBARGER | REUTERS
MICHAEL SPOONEYBARGER | REUTERS
A submerged car sits in the driveway in the Cordova Park neighborhood in Pensacola, Florida, April 30, 2014.
By Brian J. O'Connor, MoneyTips contributor

Recent floods in Oregon, Washington State, Texas, South Carolina, California and other states drowned thousands of cars under muddy, polluted water. Once those vehicles are dried-out and cleaned-up, they could show up for sale, and you could be the one who ends up taking a bath.

A flood-damaged engine is difficult or close to impossible to repair. While water is a great thing to have in the cooling system, it can do serious damage when sucked into valves and engine cylinders. After that happens, the only choice may be to replace the engine completely. While the cosmetic aspects of a waterlogged car can be prettied up with a thorough cleaning, new carpet and upholstery, the body, wiring and electrical components remain prone to rust from trapped water.

After Hurricane Sandy hit the Northeast, thousands of cars were ruined in the floods that followed. Many were scrapped or sold for parts, but at least one New Jersey dealer ran a scam where he obtained phony titles and sold the soggy cars to unwitting buyers. The dealer and others were charged by the state attorney general and pleaded guilty last year. The fraud was discovered when two of the flooded vehicles broke down on their new owners, shortly after leaving the dealer’s lot.

How widespread is the problem? After Hurricane Sandy, Kars4Kids, the nation’s largest car-donation charity, estimated that more than 250,000 cars were damaged by the storm and that half of them would be resold. One insurance broker found more than 700,000 water-damaged cars after major storms between 2001 and 2008. When you consider that the average life of a U.S. vehicle is twelve years on the road, you could easily end up with a flood-damaged car if you’re not careful.

Typically, a flood-damaged car is reported to the insurance company and sold either for parts or as a salvaged vehicle. Cars that have suffered some major damage can be refurbished and sold with salvage titles, which can serve as a warning. Some salvaged vehicles can be a good buy, if the damage was professionally repaired after a major collision, but flood-damaged cars may not be worth the risk. If a car you’re considering comes with a salvage title, that’s a sign that you need to ask more questions about the nature of the damage and the amount of repairs that were made.

In some states, the title may actually indicate that the car was flood-damaged. A “flood title” means the car ended up in water deep enough to fill the engine compartment.

On the other hand, private owners and unscrupulous third parties may try to hide water damage. One common tactic is called “title washing,” where the vehicle documents are forged, recreated on blank forms or re-titled in states that have different standards.

Checklist for Flood-Damaged Vehicles

Here’s how to tell if you’re being offered a vehicle that’s been in for a swim:

  • First, look at the title. Beyond the status, check to see if the seller’s name matches that of the person selling it. If not, the seller isn’t the registered owner, and you need to ask more questions.
  • Look for rust and metal flaking in the engine compartment, under the dashboard, in the trunk and under the seats.
  • Check for discolored carpeting and upholstery, or upholstery and carpeting that don’t match or is completely new, and may have been replaced to hide damage.
  • Look for moisture or fogging inside headlamps, taillight assemblies, overhangs of the wheel wells and other enclosed spaces.
  • Watch out for dirt or mud in unusual places. Check along seat rails, in the glove compartment, trunk and other storage areas.
  • Check for brittle, damaged wires, rusty connectors and bad ABS or airbag warning lights on the dashboard.
  • Finally, use your nose. Mildewed materials give off a distinctive, musty odor, even when an unscrupulous seller tries to cover it up. If it stinks, then the car is a bad buy.

Flood-damaged cars can be difficult to spot, but knowing the signs can help you determine whether the used car you have your eye on is a clean ride or a soaked mess.

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Also check out: “Show your car some love,” by BDN blogger .

Moneytips.com is a website that answers people’s money-related questions, publishes guides explaining products and services available in the marketplace, provides calculators to help people plan and budget, and produces related content.


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