Although initial reports of hundreds of thousands of flood-damaged cars inundating the used-car market from Superstorm Sandy appear to have been overblown, water-marred vehicles still can be a problem for buyers.
The Wisconsin Department of Transportation has issued a warning to car buyers to watch out for flood-damaged vehicles. It's estimated that tens of thousands of vehicles sustained severe water damage from Sandy.
Such water damage can make a vehicle's electrical system, including airbag sensors, prone to failure. Based on past experiences with flood-damaged vehicles associated with Hurricane Katrina, it is likely that Midwestern states will soon begin to see flood-damaged vehicles enter their used vehicle markets for sale, titling or registration.
Be on the lookout for the telltale signs of flood damage when shopping for a used car. Vehicles that were partially or totally immersed by Sandy may show up following insurance settlements with the original owners.
Once a vehicle has been cleaned "cosmetically" the flood damage can be almost undetectable.
"Vehicles that look clean might not have been checked out professionally for mechanical and electrical performance," warns Lynne Judd, administrator of the Wisconsin Division of Motor Vehicles. "Hidden damage can cause an owner serious problems weeks or even months later."
Obvious signs of flood damage include:
- A musty smell - even if the car was cleaned well, the odor will return if the windows are rolled up, and the car is left in the sun for a few hours.
- Water-spotted upholstery.
- Dirty taillights - even a professional cleaner may not remove the taillight lenses and mud will be on the inside.
- Silt around the air filter - remove the filter and tap it lightly to tell.
- Discolored or painted hood insulation. Unless the insulation was replaced, there will be mud caked under it.
- Brittle wiring.
- Rust in unexpected places.
"If there's any sign of flood damage or if it looks fine but is from one of the states affected by Sandy, it's important to conduct an independent inspection of the vehicle before buying it," says Judd. "In fact, it's a good idea to have any used car checked over."
The National Motor Vehicle Title Information System (NMVTIS) is designed to protect consumers from concealed vehicle histories, but the system isn't perfect.
Consumers can check a vehicle's history through the NMVTIS website at www.vehiclehistory.gov/nmvtis_consumers.html, so do some checking in advance of purchasing a vehicle by getting the vehicle identification number (VIN) and asking to see the title to determine if a flood-damaged brand has been indicated.
While the NMVTIS Junk, Salvage and Insurance Total Loss (JSI) program was not in place during the Katrina experience, the good news is the JSI program is now in place. Insurance companies now are required, by federal law, to report to NMVTIS any vehicle that they deemed to be a total loss.
However, the requirement to report to NMVTIS is on a 30-day cycle. Therefore, it is possible that flood-damaged vehicles may appear for titling or registration, and a NMVTIS check may not show a report by an insurer because it has not yet been reported to NMVTIS.
Both Michigan and Wisconsin have other protections in place to warn purchasers of flood-damaged vehicles.
In Michigan, vehicles meeting the definition of a flood-damaged vehicle must be issued a specially-branded title that indicates to future purchasers the flood-damaged status of the vehicle. Michigan vehicle titles with flood branding are orange (like salvage titles) to alert purchasers. A flood-damaged vehicle is defined as a vehicle submerged in water to the point water entered the passenger compartment or trunk over the sill of the trunk floor pan or door sill, or a vehicle acquired by an insurance company as part of the settlement of a water damage claim.
Wisconsin brands flood-damaged vehicles when the repairs exceed more than 70 percent of the vehicle's fair market value.