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How to avoid buying a flood-damaged car

By Barbara Marquand on February 28th, 2013

Of the thousands of insured cars flooded by Superstorm Sandy, most will end up at salvage auctions and their titles will be branded as flood damaged.

But some water-logged cars will be shipped away, cleaned up to look presentable and placed on the used-car market with a "washed" title, as if the flood damage never occurred.

Fortunately, title washing is more difficult today than years ago, thanks to the National Motor Vehicle Title Information System. Implemented in 2009, the system requires auto insurance companies to report totaled vehicles to a federal database. States are supposed to share information on vehicle titles, and so far 32 states fully participate, says the Property Casualty Insurance Association of America (PCI). Those states supply title data and query the database on every title transaction. Another eight states provide data only, and 10 states and the District of Columbia are developing systems.

Why not buy a flood-damaged car?

A properly restored car that's been damaged by a flood might look like a bargain, but the cheap price still comes with risk.

"Consumers should know what they are getting, because there is always a chance that there will be problems down the road with corrosion or of malfunctions in the electrical systems," Bob Passmore, PCI's senior director, personal lines, said in a press statement.

A flood-damaged car that's not been properly restored is a disaster waiting to happen for an unwary buyer. The car might look OK but could develop engine, transmission, and wheel and brake damage within weeks. The risk for problems depends on how deeply and for how long the car was submerged in water, and whether it was exposed to salt water, which is more corrosive than fresh water.

How to know if a car has a watery history

Follow these tips from PCI to investigate whether a used car was damaged in a flood.

  • Check the car's history online. Low-cost Vehicle Identification Number checks are available from the National Motor Vehicle Title Information System. The National Insurance Crime Bureau also provides a free VIN check on its website, and Car Fax is offering free flood-damage VIN checks.
  • Ask the dealer or seller if the car has been damaged, and ask to see the title. Check for brands that say "flood damaged" or "rebuilt salvage."
  • Check for signs of moisture in the carpets and seats. Keep in mind some unscrupulous dealers replace seat covers and carpet to conceal water damage.
  • Look for signs of rust or corrosion. Check the door hinges, hood springs and in the openings where the doors meet the body.
  • Does the car smell mouldy?
  • Check the headlghts and tail lights, where moisture can be trapped. Look for signs of water in the oil and air filters.
Finally, take the car to a mechanic for a full inspection. Even if the car's title is properly branded as flood damaged and the seller has restored the vehicle, ask a professional to take a look to make sure the repairs were done well and the car is in good condition. Keep in mind that not all car insurance companies will sell you a policy on a flood-titled car. Some of them will sell you liability auto insurance coverage but not collision and comprehensive insurance.

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