5 On Your Side

Flood-damaged cars spilling into NC

Posted February 7, 2013 6:00 p.m. EST
Updated February 7, 2013 7:05 p.m. EST

— Hurricane Sandy devastated portions of the northeast last October, and its flood waters damaged at least 230,000 vehicles. The 5 On Your Side team found that tens of thousands of those waterlogged vehicles are being cleaned, fixed up and resold, in some cases in North Carolina.

"Our preliminary research shows that about 1 out of every 5 cars damaged during Superstorm Sandy shows evidence that it's back on the road,” said Chris Basso with Carfax, a service that tracks vehicle histories. Users can run a flood car check for free, but Carfax charges for more detailed information.

The 5 On Your Side team recently watched a dealer-only auction featuring buyers from all over, including California, Texas, Georgia, Massachusetts and El Salvador. Flood-damaged car after car was sold in seconds at a fraction of its original cost.

In one case, a 2012 Audi A7 – normally valued at $58,000 – sold for $23,700. A 2010 Toyota Corolla also went in seconds for $3,900.

“Those cars are eventually going to be cleaned up and resold, some to unknowing consumers,” Basso said.

Paperwork shows some of the cars have already made their way to North Carolina. Wherever they end up, Basso says, the buyers will likely be stuck with nothing but trouble.

“The mechanical systems are going to start to corrode, the electrical systems are going to start to short out and the safety systems may not work when you need them, especially the airbags,” he said.

A 5 On Your Side investigation after Hurricane Floyd in 1999 found plenty of scammed car buyers, including a Middlesex woman who had mud coming out of her 1994 Mitsubishi Mirage’s air vents.

"I had no idea it was a flood car, none whatsoever. It started with the dash lights," Lauralee George said in a June 2001 interview with WRAL. "The passenger side window got stuck down a little bit. Then this window got stuck down all the way. When you turn on the heat, chips of mud blow at you. Then the transmission went out."

The mechanic George hired to fix the car broke the news that her purchase was a flooded car.

"When he tore the transmission out, there was mud underneath, caked underneath," she said.

For two years after Hurricane Floyd, 5 On Your Side tracked vehicles that were branded as flood cars in North Carolina and watched as they were sold, resold and bounced from state to state. Along the way, most picked up clear, or so-called "clean," titles.

That's what happened to a Cary man who bought a Nissan Maxima. He had no idea it had been flooded by Floyd until 5 On Your Side showed him the video.

“Oh geez,” Dave Floor said during a 2001 interview with WRAL. "I did everything right, I thought. There were no signs of anything that would determine this car was flooded."

Even though the Maxima was branded "flood" in North Carolina, that branding did not stick. A records check showed an insurance company sold the flooded car to a Virginia dealership for $5,700. The car was cleaned up, as well as its title.

The Maxima changed hands again before Floor bought it in October 2000 for $15,500 – almost three times what it sold for 10 months earlier. That was especially surprising to Floor since he tried to protect himself by using the car's vehicle identification number to check the title, but he only checked it in Virginia.

"I figured, well, if it's a flood vehicle, that VIN would follow it and the branding would follow it," he said.

The branding did not follow the vehicle because of an unscrupulous re-titling process dishonest dealers use. A two-year investigation by 5 On Your Side showed that it was happening to car-buying consumers all over the country.

Fourteen years later, it's still happening, according to Basso. While it's completely legal to sell a flood car, North Carolina law requires its title be branded as flooded and for sellers to tell buyers in writing. But some states have less stringent titling laws, and dishonest dealers move cars there to take advantage.

“There's an issue called title washing where a con-man will alter the paperwork of the title,” Basso said.

Once the cars are cleaned up, it can be very difficult to tell that a car has ever been in water. Basso says saltwater from Hurricane Sandy's flooding is more corrosive than rainwater and accelerates the time it takes a car to breakdown.

The best advice is to check the car's history and look for signs of water damage in not-so-obvious places, such as under seats and the spare tire well. Another option is to take it to a trusted, experienced mechanic.

“Bottom line, flood cars literally rot from the inside out,” Basso said. “No state is in the clear. These cars can make their way to any city, any state around the country as long as the titles can be cleaned."

When 5 On Your Side reported on flood cars 10 years ago, lawmakers called for a national database of car titles. There's not a fully operational one just yet.

The National Motor Vehicle Title Information System has 33 states that make inquiries before issuing a new title. North Carolina is one of eight states that submits information but doesn't check the database.

The 5 On Your Side team is tracking dozens of Hurricane Sandy flooded cars and will report updates on where they end up.