Harvey and Irma’s Used Car Lot: How to Avoid the Flood-Damaged Car Scam
Hurricanes Harvey and Irma were catastrophic for parts of the southern United States. In some places, Harvey released more than 50 inches of rain, and, overall, the hurricane dumped an estimated total of 30 trillion gallons of water throughout the U.S. Irma was similarly devastating, dropping nearly 16 inches of rain in Florida, with gusts reaching 142 miles per hour.
As the tens of thousands of affected people begin to rebuild their lives, the automotive market is in a state of disarray. According to Edmunds’ Jessica Caldwell, an estimated 366,000 new vehicles were destroyed on dealership lots in Texas, which is responsible for 9% of automotive retail sales in the U.S. This will likely put a dent in the profitability of the auto industry, which employs roughly 7.25 million Americans; for August, overall US auto sales decreased by 1.9%, largely due to Harvey.
Adding to this disarray, Cox Automotive estimates that 500,000 vehicles were damaged by flooding due to Harvey and another 200,000 to 400,000 were claimed by Irma, which will put just as many drivers in the market for replacement vehicles in the coming weeks. An increase in demand, as Economics 101 has taught us, will likely lead to increased used car prices for Harvey and Irma victims looking to make a fresh start.
The other unfortunate implication is that 700,000 to 900,000 flood-damaged vehicles could enter the used car market; some sellers will illegally try to pass these off as vehicles that have not been flood-damaged by obtaining new vehicle titles (called “title washing”).
While it is not clear how many cars were title-washed after Katrina and Sandy, a 2014 study from Carfax indicates that nearly 800,000 vehicles in the U.S. could be title-washed. It is telling, however, that the state with the highest number of potentially title-washed cars was New Jersey (77,096), just two years after the Garden State was devastated by Sandy.
That makes it crucial for used car shoppers — Harvey and Irma victims or otherwise — to be on high alert for signs of flood-damaged vehicles in the coming months. Below are tips to avoid purchasing a car that has been damaged by flood waters, particularly in the wake of Harvey and Irma.
How to Avoid Buying a Flood-Damaged Used Car
Buy from Reputable Dealers.
To avoid being swindled into purchasing a flood-damaged used car, your safest bet is to buy from a trusted dealership. These dealers have a reputation to uphold and will likely provide you with a detailed vehicle history report.
Get the Vehicle History Report
Edmunds recommends getting a Carfax vehicle history report if you suspect flood damage.
A vehicle history report will include tons of relevant information, like states in which the car has been registered. Edmunds also recommends a cheap ($7 or less) report from the National Motor Vehicle Title Information System, which will detail whether the car has been salvaged, among other key points.
You should also use the National Insurance Crime Bureau’s (NCIB) VINCheck℠ to compare a used car’s VIN against a database of cars that have been totaled (including due to flood damage).
Trust Your Senses, but Also a Mechanic’s
When you are inspecting a potential used car, be on the lookout for the following:
- Foul odors, particularly mold and mildew. These smells can signal that a car has been in standing water for a prolonged amount of time.
- Discolored carpeting or rusted metal. Stains in carpeting or seat fabrics are also indicators of standing water. Rust on the body or the undercarriage is a sign of excessive water exposure, particularly in newer cars.
- Inexplicable dirt build-up, like in the trunk or along the seat tracks. This is a sign that mud got into places where muddy feet typically do not travel.
- Water build-up in headlights and taillights. Fogginess in the lighting can also be a sign of prolonged water exposure.
- Mismatching parts, like seat materials compared to floor mats. A clever seller may replace a damaged floor mat, hoping you won’t notice that it isn’t a perfect match to the other mats or the seat fabric.
For added precaution, have a trusted mechanic give the vehicle a once-over before you sign on the dotted line. Avoid any seller who is uncomfortable with you taking the car to a mechanic.
If you do suspect a dealership or private seller of knowingly selling a flood-damaged vehicle, contact your local authorities or the NCIB immediately.
In the aftermath of Hurricane Harvey and Hurricane Irma, many in our nation are in great need. Find out how you can help provide relief, even if money is tight. Just be aware of scammers — they exist outside the used car market too.
Timothy Moore has written for the automotive industry for five years. He works as an editor and writer in Nashville.