How Should I Pay for a New Car?
October 4, 2017
The Millionaire Club
October 6, 2017
Show all

Buyer Beware – Buying Flood Vehicles from the Recent Hurricanes

Buying Flood Vehicles

With hurricane season almost behind us, many coastal residents might be breathing a sigh of relief. Three major hurricanes pummeled the U.S. in 2017, wreaking havoc on Texas, Florida, and Puerto Rico. Just because that time of year is almost over doesn’t mean we will be out of the woods just yet though. The effects from Hurricanes Harvey, Irma, and Maria will be felt long after hurricane season ends; and not only in those regions.

It is estimated that half a million cars ended up underwater with Hurricane Harvey. When you factor in Irma’s damage too, the number of cars flooded will be more likely a million; and those cars could possibly be headed to a used car lot near you meaning you could be potentially test-driving and buying flood vehicles. We saw a similar situation happen right after Hurricane Katrina back in 2005. Here’s how it will work.

Buyer beware of vehicles located in flooded areas in the year 2017. Those underwater automobiles could sink your finances as they flood the used car market over the next few months.

Owners turn their waterlogged cars over to the insurance companies to total out as losses. Which insurance companies then send out checks to cover those losses. However, afterward, those vehicles go to the wholesale market to recoup some of the money the insurance company just paid out. At that point, efforts begin to clean it up and make it shine again; which doesn’t take too much energy for those businesses that are skilled in car detailing. They dry the vehicles out and possibly replace a few things then ship the car out claiming it’s as good as new or so they say.

The problem with buying flood vehicles is that they hide their damage well in the beginning. It takes time for them to showcase their quirks. If the car sat in saltwater, the frame is eventually going to begin to rust. With so many electrical components these days, cars are like your phones—mini-computers. We all know what happens to cell phones submerged in water. They rarely bode well.

So what can you do to keep from falling prey to a car price that may seem too good to be true? Some very skilled scammers could take the salvaged title and make it look as good as new in states with lax titling laws. Pull the CarFax. Use the VIN to gather as much information about the automobile as possible. Know what you are buying before you ever buy it.

Examine cars for signs of water damage. Does the car have a moldy or mildewy smell to it? Perhaps it even has an overpowering odor of cleaning supplies. I have some friends that were looking to purchase a used high-end luxury SUV that experienced this very thing. Not only did the car reek of cleaning solutions, but it the price was about $10k less than other vehicles with comparable specs. Smells, cheaper than normal prices, and many other signs are HUGE signs that you might be buying a lemon. Pay attention to these clues. These are likely signs that you will want to pass on purchasing that car.

Look, I’m a huge proponent of buying used cars! I don’t buy new. However, beware of vehicles located in flooded areas in the year 2017. Those underwater automobiles could sink your finances as they flood the used car market over the next few months.

 

Comments are closed.