Beware Water-damaged Cars for Sale: Fraud After the Storms

By Teresa Ambord

Floods, hurricanes, and severe storms have given rise to a new element of fraud that car/watercraft buyers need to watch out for.

After the destructive storms that hit the United States a few years ago, the National Insurance Crime Bureau (NICB) reported that many unsuspecting consumers bought cars and boats that had suffered flood damage. Flooding can result in severe damage to the electrical or computer systems and may have cause airbags to fail. Selling such vehicles without disclosing the water damage amounts to fraud.  That is why, after Hurricane Katrina, the NICB has put together a database of information about vehicles and watercraft damaged in the storm.

Even if you do not live in the areas affected by the storms, before you buy a car, get the vehicle identification number (VIN) or, for watercraft, the hull identification number, and check them out on the NICB Website.   This service is free to the public, but because the information comes from many sources, the NICB has not been able to independently verify the accuracy of the data.   They also have not determined the scope of the damage to the listed vehicles, which could range from minor to extensive.

• NICB

Or, visit Carfax. For a fee, you can get the accident and repair history for any car made after 1981 just by entering the VIN, or find out if a car has a flood or salvage title.  What will not show up is if a car has been fixed by a shade tree mechanic in someone’s garage, or has been in an unreported accident.

• CARFAX

You can also do a physical inspection to spot water-damage.  Here are some points to look for:

• Upholstery:  a clue to water damage is that the upholstery and carpeting are loose, faded, discolored, stained, or non-matching. If the upholstery and/or carpet appear brand new in a car that is not brand new, it may have been replaced. Ask why.
• Trunk, glove compartment, under the seats, and dashboard:  look for rust, mud, and residue, especially on the underside of the trunk lid. Looking under the dashboard is a good clue.  This area is usually not rust-proofed, since it is not meant to be under water.  If there is a fine coat of rust, watch out.
• Ignition: when the key is turned on, check to see if the gauges, warning lights, and accessories, including the airbag and accessory lights don’t come on and function properly.
• Test: interior and exterior lights, windshield wipers, turn signals, heater and air conditioner.  Turn them all on and off several times.
• Wires:  water-damaged wires will become brittle after drying.  Check by flexing some of the wires beneath the dashboard.
• Smell: breathe deeply to check for musty odors caused by mildew.  Just as suspicious are the odors of bleach or strong air fresheners which may be an attempt to disguise musty smells.
• Dome light and instrument panel, head and taillights:  look for signs of condensation.
• Water lines:  check the door panels and the engine compartment.  While you are under the hood, notice if the sound-deadening material that is usually attached to the underside of the hood is intact.  If it’s been removed, find out why.
• Inspection: as always, have a trusted mechanic do an inspection before you agree to buy.