June 23 2015

FTC Warns of Flood-Damaged Cars on the Market

By: Rich Hosford

Buyer beware, cars affected by natural disasters may be sold in far flung places to unsuspecting customers. 

The Federal Trade Commission put out a warning to those in the market for a new car to be aware of signs that the vehicle may have been involved in a flooding event. Since used vehicles are shipped and sold across the country, these vehicles may end up anywhere. 

“Recent storms and flooding plaguing the Midwest and Southeast could impact car buyers across the country,” the warning states. “Vehicles damaged by floods in those areas can be cleaned up and taken out of state for sale. You might not know a vehicle is damaged until you take a closer look or have a mechanic check it out.”

It is illegal for a person or business to knowingly sell a vehicle damaged in a flood, but that doesn’t stop some from trying. 

When looking at used vehicles, follow these steps to help ensure you are not buying a flood-damaged car: 

- Look for water stains, mildew, sand or silt under the carpet, floor mats, and dashboard, and in the wheel well where the spare is stored. Look for fogging inside the headlights and taillights.


- Do a smell test. A heavy aroma of cleaners and disinfectants is a sign that someone's trying to mask a mold or odor problem.


- Get a vehicle history report. Check a trusted database service. There are reliable services that charge a small fee. The National Insurance Crime Bureau’s (NICB) free database includes flood damage and other information.


- Understand the difference between a “salvage title” and a “flood title.” A “salvage title” means the car was declared a total loss by an insurance company because of a serious accident or some other problems. A “flood title” means the car has damage from sitting in water deep enough to fill the engine compartment. The title status is part of a vehicle history report.


- Have your mechanic inspect the car’s mechanical and electrical components, and systems that contain fluids, for water contamination.


- Report fraud. If you suspect a dealer is knowingly selling a storm-damaged car or a salvaged vehicle as a good-condition used car, contact your auto insurance company, local law enforcement agency, or the NICB at (800) TEL-NICB (835-6422). You’ll help someone else avoid a rip-off.


If you have other questions about buying a car, click here more resources

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