Watch Out for Flood Cars: They Are Just Headaches Waiting To Happen

November 1, 2009

Here's an interesting conundrum that just happens to be very germane right now. It applies especially to online buyers or buyers at online car auctions that may be many states away. The conundrum for the buyer is this: with today's detailing technology as good as it is, how do you know if the car you may have purchased at auction on Ebay or at an out-of-state auction, if you are a dealer, isn't a flood car?

This question arose about four years ago after Hurricane Katrina devastated New Orleans and many new and used-car dealerships in that area with both salt water and fresh water damage. And it is germane today as the mid-section of the nation has been saturated day after day, it seems, with heavy flooding rains that have raised all kinds of havoc.

Indeed, just this evening the Weather Channel featured a stormchaser talking with a meteorologist and the camera shots they were using were of two late-model vehicles, or at least vehicles that looked like they were late model.

That leaves you wondering now, as it did then, just what happens to cars that were on dealers lots before the rains came.

Most reputable dealers will, of course, have the insurance adjusters poking around their lots almost as soon as the wet weather ends so they can invoke their act of God insurance to pay for the damaged vehicle. Those checks are issued pretty quickly and the insurer usually has a hauler on the ground when the check is delivered to take charge of the flood-damaged vehicles and get them to a boneyard as quickly as possible.

The reason for the speed is that there's really nothing you can do with a car once it has been immersed up to or over its rocker panels in water.

But, given today's economy and driven by the need to keep their dealerships above water, there may be those dealers who take advantage of all of the technologies that have been developed for detailing vehicles and, after drying out a flood-car thoroughly, applying those technologies to the flood cars so that they look new on the outside and even on the interior, but, which, when you take possession are nothing more than pieces of ornamental metal that have been cleaned up.

Detailing technology

While this isn't a treatise on all of the technologies that are available to good detailing houses (those places that specialize in cleaning up and refurbishing cars so that they look like new), there are a few that we can mention, just so you can get the idea of the lengths some folks may go to sell a vehicle.

For example, detailing today includes:

  • Special ionizing machines that can take just about any odor out of a car. Having seen them in action at various dealerships, we know this is a true statement. So a dealer can ask his detailer to ionize the car until any trace of odor is gone.

  • Special chrome or aluminum restorers and sealers that not only bring bright surfaces up to new-car standards, but they also polish them as well And, there are sealers that will leave these surfaces shining brightly

  • Specialize wet-sanding processes that take off any surface layers of paint that may have been damaged by water and expose the nice fresh factory paint underneath. Once exposed, they just have to give the vehicle a good wash and wax and engine bay steam clean and you're pretty much off to the races. There's a whole series of polymer waxes and sealants that are buffed on the body once the vehicle has been cleaned up and when the buffer is through you can't tell where the vehicle has been

With this done, the detailer then goes to work on the interior with specialized leather or cloth cleaners and solvents that remove all traces of damage and leave the interior looking, for all the world, as if it's brand-new. It is brand new, until you try turning the key, that is, because these cars tend to run like very broken washing machines and their transmissions tend to have problems as well.

Since they are new you may figure that you can have all the work done at your local dealership for free and you can, but the only problem is that once water has penetrated the many wire looms and PC boards and microcomputer systems and their sensors that run today's vehicles, the cars never run right again.

Online purchasers beware

As noted earlier the majority of dealers are ethical and try to destroy these vehicles before they end up in the underground gray or green or purple markets, or whatever you want to call them. But, there are those flood cars that do end up on the Internet as specials or as low-cost, late-model, low-mile new cars that are too enticing to pass up.

These cars tend to turn up at Internet auction sites where people always put disclaimers at the bottom of their ads. In some cases, dealers will even put that the cars are not for sale in their home state because of the state's tough Lemon Law. However, these specials are available to anyone outside the state.

These "dealers" or "bottom feeders" or, let's call them what they really are, scammers, then take advantage of a person's natural inclination for a bargain, especially one they can't pass up and they usually end up taking a deposit and then either running the person's credit card for the rest of the purchase or send any paperwork that needs to be signed via FedX and put in a return FedX envelope into which the buyer places a cashier's check for all fees and, if the scammer is good, for shipping too. In any case, the buyer will have to pay for shipping as the scammer will usually find a reason the person can't come down and test drive it and then plate it up and drive away from the dealership.

Scammers tend to pray on the trust and faith the buyer has, especially if the buyer only sees a series of shots taken from just the right angles that will highlight things and leave the stuff the scammer wants hidden very under wraps. The individual who buys this vehicle usually has nothing to go on but this series of photos, which are usually very good.

Even dealers can be victims

Even auto dealers themselves can be victims of the scammers. With the growth of streaming video and high-speed lines, it's not unusual for a dealer, say in Boston, to be sitting at a PC while he participates in an online auction.

The dealer will have access to the cars that will be for sale and will also special online access to just the right photos that show off the vehicle in just the right light. It is tough, speaking from the experience of watching managers do this, to tell the exact quality of a vehicle even on an advanced LCD screen. So, the dealer can be lulled into a false sense of security by the ad writeup and can then be lulled into a state of I have to buy that car because I can't believe its price.

The dealer, in this case, should be sophisticated enough to know that there's really no such thing as an unbelievable price. If the vehicle is priced like that you can believe there is something very much wrong with it.

Still, there are those dealers who are desperate to get new inventory onto the lot and they may take what the think is advantage of the special price.

Not worth the headaches

Believe this statement, buying a car that has a super-low price, but is new is a prescription for a long-distance headache.

Once the dealer has purchased a flood-damaged car he has to go through hoops just to prove that the car was damaged and if the car was damaged in another state, then he has to get a judgment against the seller and have it enforced. It's not easy and it takes a long time to do.

Again, having watched managers deal with this type of problem has shown that this type of deal is not a deal, it's a nightmare and one that you should stay away from.

Caveats aside, what should you look for

Now that we have all the caveats and warning aside, if you purchase one of those vehicles what should you look for and what should you do?

To answer the second question first, you must document, document, document. That means getting a high-grade digital camera and decent flash and then getting dirty because you will be looking in places where you never though it was possible to look.

Here is where you look and what you look for (be sure the car is on a lift if you have access otherwise you'll need a good pneumatic jack and roller because you'll be on your back doing much of this work. If you're an individual, a good set of ramps is a must, along with the roller:

  • The exhaust system and tailpipe for starters. Look for any unusual corrosion on the C-clamps and look for any C-clamps that may seem too new for the system.

  • The exhaust system and tailpipe: Look for any signs of water damage such as high water marks. You can tell by looking at a resonator if water was anywhere in the vicinity, especially if you find traces of mud on the top of it. Be sure to take as many pictures as possible

  • The exhaust system and tailpipe: Look into the tailpipe itself for any signs of water or other debris which may have floated inside

  • The gas tank and straps: Take a close look at the gas tank and the holding straps. If they seem strangely corroded or look as if they have been freshly covered with a rust protestant, then chances are someone has tried to hide something. Look for signs of peeling around the top of the gas tank.

  • The entire rear end: This seems like a tall order and it is but what you are looking for will jump out at you. For instance, you will be able to see signs of sand and debris in places that people forgot to clean, like the interior of the bearing assembly or the top of the bearing assembly

  • The entire rear end: Look at the rear struts for signs of water and sand. They will look much like the high- and low-water marks you see at the beach. You'll also find sand and other debris in tiny crevices that the retailers usually missed because they can't get everything.

  • Rear axle: In a front drive car look at the struts for signs of sand and debris at the base of the spring and on the bottom of the tube itself. While you're there, it's a good idea to run your hand along the top of the axle itself to see if anything was left there. You may be surprised.

  • Rear suspension: Look at the control arms and any placement arms for telltale signs of high tide as in sand or grass or other debris. You'll likely find it in the center of any V angles or any Y angles.

  • Rear wheel: Check the spin or the rear wheel and see if it sounds like there's just too much rust built up on the rear disc. Listen, also for any sounds of metal-to-metal grinding which could indicate that there's dirt in the bearing/brake assembly.

  • Rear Quarters: Get a bright light and shine it up in there and look for any signs of sand or mud that might have been missed. Look for weird corrosion patterns and for any other debris that might indicate water damage.

Notice that we're concentrating on the rear and the reason is that the seller usually never thinks much of it. He'll want the engine steam cleaned and polished and he'll want the firewall clean spotlessly as well as the wheel wells and front wheels and transaxle. The reasoning, apparently, is that this is where the inspection of the car will stop, but it isn't in our interest to do that.

While you are poking around the hood, you might just want to look for signs of sand that might have been missed and look to see if there has been any repainting or there are new clamps and hoses. All of these are dead giveaways that something's up. Poke your light into the upper front wheel wells and take a close look at the top and you might find some interesting corrosion that might have been missed. And, as you walk under the car again (this is not a fast process) be sure to look at the inside of the rocker panels because you may find clogged and underside of the fenders and quarters because you may find blocked up weep holes.

Interior too

The body of the car doesn't have all the fun in this process. You have to take a close look at the interior and here are some places to look:

  • The headliner: see if it is new or has been restored in any way. If you pry away a piece of molding and find not only a slightly different color but also sand and other debris, then you know this car has been underwater

  • The doorliners: Look for telltale cleaning marks and see if the fabric has been recently cleaned professionally. Also, run down the windows and listen for anything that may sound like debris or rubbing.

  • The mats: Of course the rug has been cleaned thoroughly, but are the mats the same color and do they have tiny bits of sand in them. If the mats are brand new, while the rest of the interior is just cleaned and shampooed then it's a good bet something has gone on there.

  • The steering: Listen for sounds of grit in the steering wheel and feel the play of the shifter. Again, if there's any sound of grit or grinding, chances are there are problems.

As you can see the list goes on and on and you'll probably find places to look that we haven't even thought of. Be sure you document everything and have a complete mechanical inspection done too with the results notarized, if possible.

Then, once you've gathered all of your material,call the selling dealership and ask them to take the offender back. If you are a dealer and have worked through an auction, then the chances are good there's a return or arbitration process that will solve your problem. Your insurance may help, too.

If you are a consumer and you use Ebay you now have buyers protection that will work with you to prevent this type of fraud because that's exactly what it is.

Remember the old saw: if the deal's too good to be true, the chances are it isn't!

Source: Author's experience

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