Floods and hurricanes create an opportunity for criminals to defraud unsuspecting consumers by selling them flooded cars. Used-car buyers should always be aware of this risk—especially after an active hurricane season like we’ve had this year.
By definition, a flooded car has been completely or partially submerged in water so that its body, engine, transmission or other parts have been damaged. If the vehicle is so damaged that it can no longer be driven, your insurer usually settles the claim by buying the vehicle and selling it as a salvage vehicle at an auto auction.
Dishonest and unscrupulous car dealers can also buy flooded cars and dry and clean them. Yet these cosmetic improvements hide plenty of hidden flood damage. And this damage can cause everything from rust and corrosion to major electrical problems later on.
These dealers then transport the flooded cars to states bypassed by the storm or natural disaster and sell them as used vehicles to unsuspecting buyers. They don’t disclose the damage on the vehicle's title as they are required, which is a crime called “title washing.” The vehicles are then sold with the hidden damage. The video below from the Insurance Institute for Highway Safety shares information about flooded cars.
Flooded car fraud prevention tips
Fortunately, there are steps used-car buyers can take to avoid buying flooded cars. They include:
Learn more about flooded cars and how to avoid buying one by watching the video above.