AARP-Consumer Alert Bulletin (Feb. 2005)

Scam Alert…

Oh No! Is That Rust?

Thousands of water-damaged automobiles are expected to go on the market, literally taking American car buyers for a ride. More than 120,000 vehicles were damaged last year by hurricanes Charley, Frances, Ivan and Jeanne. Many have been declared a "total loss"—the usual pronouncement after a car’s engine, electrical system or interior sits water-soaked for two days or more. In such cases, insurers will pay off the owners and haul the vehicles to a salvage auction, ostensibly to be sold for spare parts, says Jeanne Salvatore of the Insurance Information Institute, a trade group in New York.

But many of the cars are still drivable—at least temporarily—and will wind up back on the roads. "People called curbstoners buy these cars at auction, clean them up and sell them privately or through dealerships, usually out of state, where they can be titled more easily without disclosing the water damage," says Christopher Basso of CarFax, a vehicle-history tracking service. Months after the sale, wet wires dry out and crack. Rust attacks the body and engine. Brakes, door locks, power windows, and heating and air conditioning units fail.

The return of so-called flood cars to America’s roads is nothing new. More than half of the 75,000 cars damaged by 1999’s Hurricane Floyd were resold from salvage, including a used Pontiac Grand Am purchased for $4,000 by Diane Zielinski in suburban Philadelphia. "It ran well when we took it for a test drive. But three and a half weeks later it literally exploded while my teenage son was driving, spewing hunks of engine block and oil all over," Zielinski says. "He’s lucky he wasn’t killed."

It turns out that one year earlier; a New Jersey insurance adjuster had pronounced her Pontiac "unsalvageable."
Instead of heading to the junkyard, the car was issued a new title in Pennsylvania—with no indication of its soggy past—even though Pennsylvania is one of 22 states requiring flood damage disclosure on state vehicle records. Zielinski discovered the car’s history only after doing a CarFax check after the sale.

It’s not illegal to resell flood cars. So in addition to an Expert’s inspection, how can you avoid getting soaked?
Examine engine crevices, the glove compartment, spare-tire wheel well and under seats for water lines or signs of mud or rust. Check dashboard gauges for accuracy and water condensation.
Test electrical equipment-wipers, lights, and heater and so on. One week before Zielinski’s car exploded, the power windows and turn signals malfunctioned. Be suspicious of carpeting that looks too new.