Hurricanes Harvey and Irma howled into Texas and Florida as some of the most powerful storms ever to hit the United States. Between tidal surge and massive rainfall totals, the storms instantly created nearly one million flood damaged cars and trucks. What does this mean for a buyer looking at used cars?
When you pull a million vehicles off the road, you also create an immediate demand for replacement rides. That’s good news for car dealers, but it can be bad news for some unwary consumers.
Carfax estimates that fully 50 percent of flood damage cars and trucks will find their way back on the road. Some of these used cars be sold with full disclosure about their past. Others will have murkier backgrounds or no mention of damage at all. And in some states, getting a clean title for a car with flood damage is perfectly legal.
These can be scary times if you are in the market for a used car. Even if you live a thousand miles from the storm-affected areas.
If you are driving a 1920 Model T and it is submerged for whatever reason, you can just dry it out, clean the plugs, change the fluids, scrape off the rust and be on your merry way.
Modern vehicles are a tad touchier. If salt water from a surge or fresh water from a flash flood hit the electronic control units (ECU), your ride is toast.
Today’s cars are computers on wheels. A newer car or truck can have more than 100 million lines of code controlling everything from acceleration to braking to airbag deployment and much, much more. Even base models have upwards of 30 electronic control units. Luxury cars can have more than a 100. And they all talk to each other.
Add a little salt water for an hour, or a week, and the ensuing corrosion can wipe out essential controls. Even if the car is dried out quickly and there is minimal damage to the ECUs, what damage that is done will eventually screw something up. It then becomes a mechanic’s nightmare searching for a needle in a massive electronic haystack.
Of course, electronics are not the only vulnerable targets in a flood. Mold can form almost anywhere and potentially create a health hazard.
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If fluids are compromised (oil, hydraulics, coolant) they need to be replaced and systems checked for damage. Dirt, sand and debris are slow acting abrasives that are not doing your ride any favors.
A flood damage car is not a new phenomenon. Car insurance companies provide protection against flooding under “comprehensive” coverage. If your car is financed, the bank most likely insists that you carry comprehensive.
However, there are millions of car owners who do not have flood coverage, let alone car insurance at all. In Texas, which was hit by Hurricane Harvey, an estimated 15 percent of licensed drivers have no insurance even though it’s required by law.
Those people without insurance are typically folks who can’t afford it. They need to fix their vehicle or clean it up and sell it to get new wheels. And these cars can be real problems for people looking for cheap used cars.
But the bigger risks are the vehicles that go through the insurance process. When an insurance company “totals“ a vehicle, it pays off the insured and sends the vehicle to a salvage auction.
At the auction, the car or truck is sold for parts or scrap or as a salvaged vehicle. The auction files a notice with the state’s DMV which then “brands” the title with a description like “flood.” Each state maintains a database of salvage sales, but they are not comprehensive and they don’t share information with other states.
Altering a vehicle title is a crime. But it is a state crime. There is no federal vehicle registration, and as a result there is no national database.
A person who alters, or “washes,” a title by removing the brand, can get a clean title in another state because that second state has no registration history from the first. Missouri and Mississippi are laxer in their title process than other states, but in theory, it can be done in any state.
Don’t think it’s that big of a problem? Carfax, which gets reporting from all 50 states including “branded” titles, estimates there are 800,000 salvaged vehicles on the road today that are registered with washed titles. That’s a lot.
In New Jersey, a car dealer admitted to selling 230,000 cars damaged by Hurricane Sandy. He bought the cars at auction. The titles were branded “for parts only” – meaning they could not be sold as a functioning vehicle. He obtained doctored titles from a former New Jersey Motor Vehicle Commission employee. A quarter million cars bought for a song and sold for full retail is very big business.
If you are looking at a used car, regardless of where you live in the country, here are a few tips to avoid buying a Harvey or Irma souvenir:
If you’re serious about the vehicle, get a report from a service like Carfax to get the vehicle’s history.
Does the car smell musty, or can you tell the seller sprayed an overpowering scent? Look out for mold. It grows anywhere. Pull up a corner of carpet, check the seat mounts, run your finger under the dash (a hard place to detail).
Be on the lookout for debris in the engine compartment. Sand, leaves and anything else that shouldn’t be there are signs of flooding.
Condensation in taillight and headlight lenses are an indicator they were under water.
Trunks are hard-to-clean areas too. Look at the roof of the trunk lid for debris plastered on. Check the spare tire storage area, the hinges for the lid, and lift the carpet to see what’s there.
Know the Blue Book value of the car you’re looking at. If it seems like a ridiculous bargain, be especially wary.
A flood damage car, even those with extensive repairs, will never be the same. In the worst case scenario, they can be deadly.
With over a million flood damage cars and trucks sitting in Texas and Florida, be particularly careful with any used car purchase you might contemplate.
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