Buyer beware of cars damaged by Katrina flooding
09-17-05, 07:01 AM
#1
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Buyer beware of cars damaged by Katrina flooding
Saturday, September 17, 2005
By James Prichard / Associated Press
Vehicles on a car dealership lot sit surrounded by floodwaters in the aftermath of Hurricane Katrina on Sept. 10 in New Orleans. Experts are warning prospective car buyers to watch closely in the coming months for telltale signs of flood-damaged cars and trucks hitting the used car market.
GRAND RAPIDS -- In the market for a good used car? Watch out for vehicles that sat submerged for days in the flooded streets of New Orleans, Biloxi or other Gulf Coast cities ravaged by Hurricane Katrina.
Insurance companies usually purchase such vehicles from policyholders, declare them "totaled" and then sell them at auction to be resold for parts, many of which will still be suitable for use in other cars and trucks.
But some unscrupulous dealers and wholesalers buy flood-damaged cars at scrap prices, clean them up, retitle them and resell them. While the vehicles may look good, their electronics and safety systems are likely damaged -- and threaten the safety of the new owners.
After virtually every major U.S. flood, the Better Business Bureau warns prospective used car buyers to be on the lookout for flood-damaged vehicles.
"You want to be extra cautious," said Ken Vender Meeden, president of the Grand Rapids-based Better Business Bureau of Western Michigan. "Unfortunately, deals that sound too good to be true for cars could include damaged goods. 'Let the buyer beware' applies most readily in post-hurricane-type disasters."
When Hurricane Floyd struck Florida in 1999, an estimated 75,000 vehicles were ruined by floods and totaled by insurance companies, according to Carfax Inc., a Fairfax, Va.-based firm that performs background checks on used vehicles.
More than half of those cars and trucks, however, were resold to buyers unaware of the vehicles' past or uninformed about the extent of the damage caused by flooding, Carfax said.
Prospective buyers should have a used car's history researched to make sure a flood-damaged title hasn't been issued for it, Carfax spokesman Larry Gamache said. A search using a vehicle identification number can be performed for a fee at Web sites such as Carfax.com and AutoCheck.com.
A mechanic also should inspect the vehicle.
"A mechanic is going to be able to look for signs of water damage that won't appear on a title document or a piece of paper," Gamache said. "Things like water levels in the engine well, rusting wires. He can look inside your ventilation system and see if there's any debris."
Prospective buyers also can do a bit of detective work themselves. The National Automobile Dealers Association, which represents approximately 20,000 new car and truck dealers, offers a 10-step inspection checklist to guide shoppers.
While there's no foolproof way to detect vehicle flood damage, NADA officials say potential buyers should inspect the interior, trunk and engine compartment for rust, musty odors and other signs of significant water damage.
"Dealers are very concerned these affected vehicles could enter the used car market," said Jack Kain, chairman of the McLean, Va.-based association. "Fortunately, there are steps that car shoppers can take to detect water damage and protect themselves."
While nearly all states have laws against sellers misrepresenting flood-damaged cars and trucks to their buyers, the nation needs a uniform system for clearly identifying such vehicles, said Clarence Ditlow, executive director of the Center for Auto Safety.
Ditlow said his Washington-based advocacy group has lobbied state and federal lawmakers to mandate the words "flood damaged" be placed on certificates of title of all flooded vehicles.
He also wants to require that "flood damaged" markers be placed on doorjambs of affected vehicles. The sale of all used cars should include disclosure sheets listing any known problems, he said.
"Every consumer buying vehicles should be aware that they may be buying flooded vehicles," Ditlow said. "Just because you live in Nevada, don't think you aren't going to run into a flooded vehicle."
Jim Casey, a manager at Berger Chevrolet in Grand Rapids, said his dealership checks the titles of all used vehicles it purchases at auction and accepts in trades to make sure none have had flood damage.
Casey advised potential buyers to closely examine titles, which can be altered, falsified or laundered through another state. In Michigan, titles for good cars are printed on green paper while titles for salvage vehicles are printed on orange paper.
"There are ways to get a clean title (for a flood-damaged car) and that's the thing that people need to be aware of," he said.
On the Net:
Better Business Bureau: http://www.bbb.org
Center for Auto Safety: http://www.autosafety.org
National Automobile Dealers Association: http://www.nada.org
By James Prichard / Associated Press
Vehicles on a car dealership lot sit surrounded by floodwaters in the aftermath of Hurricane Katrina on Sept. 10 in New Orleans. Experts are warning prospective car buyers to watch closely in the coming months for telltale signs of flood-damaged cars and trucks hitting the used car market.
GRAND RAPIDS -- In the market for a good used car? Watch out for vehicles that sat submerged for days in the flooded streets of New Orleans, Biloxi or other Gulf Coast cities ravaged by Hurricane Katrina.
Insurance companies usually purchase such vehicles from policyholders, declare them "totaled" and then sell them at auction to be resold for parts, many of which will still be suitable for use in other cars and trucks.
But some unscrupulous dealers and wholesalers buy flood-damaged cars at scrap prices, clean them up, retitle them and resell them. While the vehicles may look good, their electronics and safety systems are likely damaged -- and threaten the safety of the new owners.
After virtually every major U.S. flood, the Better Business Bureau warns prospective used car buyers to be on the lookout for flood-damaged vehicles.
"You want to be extra cautious," said Ken Vender Meeden, president of the Grand Rapids-based Better Business Bureau of Western Michigan. "Unfortunately, deals that sound too good to be true for cars could include damaged goods. 'Let the buyer beware' applies most readily in post-hurricane-type disasters."
When Hurricane Floyd struck Florida in 1999, an estimated 75,000 vehicles were ruined by floods and totaled by insurance companies, according to Carfax Inc., a Fairfax, Va.-based firm that performs background checks on used vehicles.
More than half of those cars and trucks, however, were resold to buyers unaware of the vehicles' past or uninformed about the extent of the damage caused by flooding, Carfax said.
Prospective buyers should have a used car's history researched to make sure a flood-damaged title hasn't been issued for it, Carfax spokesman Larry Gamache said. A search using a vehicle identification number can be performed for a fee at Web sites such as Carfax.com and AutoCheck.com.
A mechanic also should inspect the vehicle.
"A mechanic is going to be able to look for signs of water damage that won't appear on a title document or a piece of paper," Gamache said. "Things like water levels in the engine well, rusting wires. He can look inside your ventilation system and see if there's any debris."
Prospective buyers also can do a bit of detective work themselves. The National Automobile Dealers Association, which represents approximately 20,000 new car and truck dealers, offers a 10-step inspection checklist to guide shoppers.
While there's no foolproof way to detect vehicle flood damage, NADA officials say potential buyers should inspect the interior, trunk and engine compartment for rust, musty odors and other signs of significant water damage.
"Dealers are very concerned these affected vehicles could enter the used car market," said Jack Kain, chairman of the McLean, Va.-based association. "Fortunately, there are steps that car shoppers can take to detect water damage and protect themselves."
While nearly all states have laws against sellers misrepresenting flood-damaged cars and trucks to their buyers, the nation needs a uniform system for clearly identifying such vehicles, said Clarence Ditlow, executive director of the Center for Auto Safety.
Ditlow said his Washington-based advocacy group has lobbied state and federal lawmakers to mandate the words "flood damaged" be placed on certificates of title of all flooded vehicles.
He also wants to require that "flood damaged" markers be placed on doorjambs of affected vehicles. The sale of all used cars should include disclosure sheets listing any known problems, he said.
"Every consumer buying vehicles should be aware that they may be buying flooded vehicles," Ditlow said. "Just because you live in Nevada, don't think you aren't going to run into a flooded vehicle."
Jim Casey, a manager at Berger Chevrolet in Grand Rapids, said his dealership checks the titles of all used vehicles it purchases at auction and accepts in trades to make sure none have had flood damage.
Casey advised potential buyers to closely examine titles, which can be altered, falsified or laundered through another state. In Michigan, titles for good cars are printed on green paper while titles for salvage vehicles are printed on orange paper.
"There are ways to get a clean title (for a flood-damaged car) and that's the thing that people need to be aware of," he said.
On the Net:
Better Business Bureau: http://www.bbb.org
Center for Auto Safety: http://www.autosafety.org
National Automobile Dealers Association: http://www.nada.org
09-17-05, 07:22 AM
#2
Lexus Fanatic
Yes.....I went briefly into the issue of flooded cars for re-sale in a response in the CLUBHOUSE/ DEBATE forum, but this article covers it in more detail.
I fully agree with the "buyer beware" issue. Some dealers and individuals are honest
.....and some are not. 
If the mods have no problem with this, I would also invite any CL member looking potentially at a car for sale that they suspect may have been an ex-flood victim to post anything that he/she sees on the car that looks suspicious ( if possible with a clear picture ), and even though most of us will not be able to physically see the car maybe we can discuss it and help decide if it is a risky buy or not. CarFax and similiar organizations can also be useful but they don't catch everything, and dishonest people and dealerships will try and keep it disguised as much as possible....even to the point of repaints and new parts.
I fully agree with the "buyer beware" issue. Some dealers and individuals are honest
.....and some are not. If the mods have no problem with this, I would also invite any CL member looking potentially at a car for sale that they suspect may have been an ex-flood victim to post anything that he/she sees on the car that looks suspicious ( if possible with a clear picture ), and even though most of us will not be able to physically see the car maybe we can discuss it and help decide if it is a risky buy or not. CarFax and similiar organizations can also be useful but they don't catch everything, and dishonest people and dealerships will try and keep it disguised as much as possible....even to the point of repaints and new parts.
Last edited by mmarshall; 09-17-05 at 07:35 AM.
09-17-05, 08:32 AM
#3
Out of Warranty
A trick my old mechanic showed me many years ago when I was looking for a used car for my parents, was to pop off the interior panel from a back door, if possible - just enough to get a look at the backside of the panel. If it's moldy, water stained, or smelly, run, don't walk. Shine a flashlight down inside the door while your're there and look for debris. Crooks are not very thorough in their "restoration" because they're greedy. Those areas are difficult (and expensive) to reach, and are normally overlooked. In the same way, lift the carpet and pad in the trunk. Look in the spare tire well.
You can count on seeing MANY of these cars on the market in the next year.
You can count on seeing MANY of these cars on the market in the next year.
09-17-05, 08:37 AM
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Originally Posted by Lil4X
A trick my old mechanic showed me many years ago when I was looking for a used car for my parents, was to pop off the interior panel from a back door, if possible - just enough to get a look at the backside of the panel. If it's moldy, water stained, or smelly, run, don't walk. Shine a flashlight down inside the door while your're there and look for debris. Crooks are not very thorough in their "restoration" because they're greedy. Those areas are difficult (and expensive) to reach, and are normally overlooked. In the same way, lift the carpet and pad in the trunk. Look in the spare tire well.
You can count on seeing MANY of these cars on the market in the next year.
You can count on seeing MANY of these cars on the market in the next year.
09-17-05, 11:36 AM
#5
Lexus Fanatic
Yes, people do it, but in my opinion it still takes nerve and guts. This is considered a serious matter in many areas, and can bring not only a loss of a dealer's franchise and license to sell cars but a significant jail term as well. In some cases....if the sale is conducted across state lines......it can be a Federal crime.
It also begs the question of what honest people and dealerships are going to do with many of the still usable cars
....the ones that are not junked or totalled by insurance. A lot of them are otherwise drivable.....at least for a while, and there is no reason to have them junked if they just have minor flood damage or minimal exposure to water. True, they cannot ( legally ) be sold as new cars.....and probably not as Certified Used Cars either.....but that doesn't mean they are ready to be scrapped. A lot of time, labor and resources went into building these cars at the factory, and it would be a shame to scrap them needlessly.
My own opinion on this matter ( for what little it may be worth ) is for dealerships to sell these cars at half of whatever BlueBook retail is, place a "Flood" sign and a disclaimer on the cars, waive the factory warranty, and let buyers know that they are getting a questionable or risky car for a very low price. That IMO is the fairest and most practical thing to do. It gives the dealership SOME money and keeps the losses down while also making the buyer aware......for half-price....... that they may not get full normal new or used-car service out of it.
It also begs the question of what honest people and dealerships are going to do with many of the still usable cars
....the ones that are not junked or totalled by insurance. A lot of them are otherwise drivable.....at least for a while, and there is no reason to have them junked if they just have minor flood damage or minimal exposure to water. True, they cannot ( legally ) be sold as new cars.....and probably not as Certified Used Cars either.....but that doesn't mean they are ready to be scrapped. A lot of time, labor and resources went into building these cars at the factory, and it would be a shame to scrap them needlessly.My own opinion on this matter ( for what little it may be worth ) is for dealerships to sell these cars at half of whatever BlueBook retail is, place a "Flood" sign and a disclaimer on the cars, waive the factory warranty, and let buyers know that they are getting a questionable or risky car for a very low price. That IMO is the fairest and most practical thing to do. It gives the dealership SOME money and keeps the losses down while also making the buyer aware......for half-price....... that they may not get full normal new or used-car service out of it.
Last edited by mmarshall; 09-17-05 at 11:59 AM.
09-17-05, 03:18 PM
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What is your opinion on getting a flood damaged car for a rolling chassis? Say I wasn't in the market for a lexus but another make and was going to swap the engines? If all the engine electronics were gone, and if I could get it at auction price, would it be worth it to buy it or would there usually be too much damage?
-Dix
-Dix
09-17-05, 05:23 PM
#7
Lexus Fanatic
Originally Posted by Dixond
What is your opinion on getting a flood damaged car for a rolling chassis? Say I wasn't in the market for a lexus but another make and was going to swap the engines? If all the engine electronics were gone, and if I could get it at auction price, would it be worth it to buy it or would there usually be too much damage?
-Dix
-Dix
This is important, however, if , as you say, you want to swap engines...something that in many ways goes without saying. The location and type of the motor mounts, ( they have to be compatible with the engine you want to fit in), the amount of room you have under the hood to fit the engine in, and the amount of air that can circulate around the engine to help keep it cool. Auto compaines have found out that problems can arise from engines being crammed into too-small a space underhood...as Ford did with the 3.8L V6 in the Taurus and Sable. It not only makes it difficult to work on but also causes heat-related problems. An engine can have the best radiatior and cooling fan on the planet but if there is a lack of air flowing around it it will tend to run hot.
Good luck, though, in your prospects.
Give us another post when you have a few more specifics about the chassis, the type and amount of damage, and what engine you want to swap.
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