Buying a Used Car? Check for Flood Damage First!

Even before vehicles filled with flood-water last hurricane season in Houston and Florida, there were more waterlogged cars on the road than years past. That’s because drivers feel a storm’s trickle effect years later.

Cars flooded by Hurricanes Sandy and Katrina are still on the road today, along with flood-damaged cars from storms (and other water disasters) that never had a name. You’ll find these cars in every state, putting drivers at risk.

Flood-Damaged Used Cars Are a Safety Issue

Water and cars simply don’t mix. It’s a potential safety, health, and financial issue. Unscrupulous people fix flooded cars to get more money out of them. But car experts argue that while you can cosmetically clean up a flood-damaged car, it’s hard to fix the damage mechanically.

“Most cars are now controlled by electronics and computers. When you mix water in there, it’s really a recipe for disaster,” explained Chris Basso of CARFAX, a leading provider of vehicle history reports.

The water breaks down the electrical system, corrodes and rusts parts, and can even compromise airbags, anti-lock brakes, and other safety systems. Water can affect cars in unpredictable ways, and the problems don’t always reveal themselves immediately. That’s why experts strongly suggest you research your car’s history before purchasing it.

“Information is readily available to help close the loops on con men and prevent them from reselling these cars,” Basso said.

Title Washing Dupes Buyers

When flood waters damage a car, it’s supposed to be reported to that state’s Department of Motor Vehicles. Rules vary by state, but the title is branded in some way to indicate the damage and alert a potential car buyer. Even though a car receives a flood-damage brand, it can still return to the road, depending on the extent of the damage. The title will always bear the flood mark, though – or at least it’s supposed to.

Even before Harvey and Irma hit, Texas had the most flood-damaged cars, followed by Louisiana, Pennsylvania, Florida, and Kentucky, according to CARFAX. These cars are still in use or for sale.

The provider of vehicle history reports found the problem is bigger than ever before, up 20% last year even before the devastating hurricane season. And these are just the cars we know have been damaged by storms. What about the flood-damaged cars that never got branded?

Loopholes in state titling and disclosure laws allow criminals to clean a title of any indication of flood damage. This cleaning of the title is known as title washing.

In some cases, the title never gets branded. That happens when an insurance claim isn’t filed or the driver didn’t have the proper insurance coverage. So, the individual car owner cleans up the car to get some money out of it rather than reporting it and taking a financial hit. That puts other drivers at risk.

Historically, about half the cars submerged in water end up back on the market, according to CARFAX. Some are branded and some are not. That’s why consumers need to research the history of a car before they buy it, with a vehicle history report and an inspection by a mechanic.

Check the Asking Price and Trade-In Value

The first step in buying a used car is to make sure the asking price and trade-in value are in line with expectations. A low price doesn’t just mean you’re getting the best deal possible. While every used car is going to fall within a certain price range, if the car you’re looking to buy is severely undervalued, you should ask questions about why that is that the case.

Be sure to use online tools like Edmunds and the Kelley Blue Book, which will offer pricing information based on the car’s make, model, trim, options, mileage, and other details. You can also browse used car buying sites like CarMax to get an idea of what similar cars are selling for.

Get comfortable with the tools these sites offer before you go used car shopping, so that once you are out on the lots, you can get right down to business.

Ask for a Vehicle History Report

Flood-damaged cars are everywhere – not just used vehicles, but new cars as well, which might have flooded while on the lot. The good news is, technology makes it easier than ever to research the history of a car with a Vehicle Identification Number or VIN. You can find it on the door jamb or under the windshield. It’s a 17-character set of letters and numbers that uniquely identify your vehicle.

Most reputable car dealerships offer a free VIN check through CARFAX or its top competitor, AutoCheck. With so many drivers searching for cars online, these reports are often available with one click of your mouse while looking at the car online. If you don’t see a report, ask for one.

The vehicle history report should provide all of the following information:

  • Any open recalls
  • Odometer rollback
  • Accident or frame damage
  • Junk, flood, or salvage title branding
  • Registration information
  • Maintenance history
  • Whether the vehicle was used as a taxi, rental, or lease vehicle

If a dealership doesn’t want to provide you with a vehicle history report, you can purchase one on your own. However, if they aren’t willing to give you a report for free, you might want to question why.

Check Free Vehicle Databases

If you can’t get a vehicle history report, you can still check certain aspects of a vehicle’s history for free. The National Motor Vehicle Title Information System (NMVTIS) – which is managed by the U.S. Department of Justice – provides information on a vehicle’s title history and whether it’s branded as salvage, junk, or a flood car. It also includes odometer readings, total loss history, and salvage history. There are several approved NMVTIS providers, and fees may vary.

In addition, CARFAX offers a free flood database open to all consumers. While this won’t give you a complete look at the vehicle’s history, it will at least let you know if the car received a flood title at some point.

Another free database to check is the National Insurance Crime Bureau VINCheck database. This is an industry database compiled by insurance companies that includes information about stolen and salvaged cars reported by NICB members. Membership includes all of the major insurance companies, along with many others.

Take It for a Test Drive

Even if everything checks out with the vehicle history report and free database checks, your research isn’t over. Whenever you buy any used OR new vehicle, it is a good idea to take it for a test drive to see how it handles – and what problems might arise while in operation.

If the salesman won’t let you take the car for a test drive or seems hesitant for any reason, then walk away immediately. There’s no need to get in an argument over it or continue the car-buying process with someone who isn’t willing to let you test your next family car.

Have a Mechanic Inspect the Car

Vehicle history checks are useful for checking a car’s reported history, but sometimes a mechanical inspection will reveal details that historical data may not provide. For example, a mechanic can spot signs of accident and water damage even if it’s been repaired.

Most mechanics charge less than $100 for an inspection. It’s a small investment considering the safety, health, and financial costs of buying a potentially waterlogged car.

Protect Yourself After You Buy

You’ve looked at the used vehicle history, run the VIN through free flood databases, given it a test drive, and had a mechanic inspect it – and now you’re ready to buy! But don’t forget to protect yourself after you’ve signed the sales contract as well:

  • If the car is new enough, it might still be covered by a manufacturer’s warranty.
  • You may also be able to get an extended warranty to cover some damage.
  • Check your car insurance policy to see if it covers flood damage as well.
  • If you paid all or in part with a credit card, it might offer limited purchase protection for the sale (be sure to check with the issuing bank or credit union first, though)
  • Understand the return policy if you purchase from a used car dealer.
  • While all states have lemon laws, used cars are only covered in some states (like New York and California), which protect against cars going bad – be sure to check what laws may be applicable where you live.
  • Keep up with regular maintenance, have problems deduced and fixed immediately, and get it inspected on schedule.

Stay Alert for Flood-Damaged Cars

If the price is too good to be true, be on alert. There might be something wrong with the vehicle.

Also, be careful where you buy your car. Flood-damaged cars make their way to auctions, private sales, and dealerships. However, you’re most vulnerable with private party sales, since an individual is less likely to report damage.

While there are still loopholes in the law that make it easy to hide damage, there’s a coordinated effort to make data available for free or a small fee to prevent consumers from getting ripped off. Using the information that’s at your fingertips before you fill out the paperwork can go a long way towards keeping you and your family safe.