Flood-damaged used vehicles
By Louis Rumao:
The total damage due to Hurricane Katrina of 2005 is estimated at $108 billion, with nearly 570,000 vehicles damaged beyond repair. Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car market The total damage due to Hurricane Katrina of 2005 is estimated at $108 billion, with nearly 570,000 vehicles damaged beyond repair. Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car market.
After every hurricane and typhoon, debate begins whether the event was caused or made worse by global warming. Climate-change believers and the deniers argue their opposing viewpoints, while a reasonable climatologist would say that the storms are caused by “natural variability,” and possibly “enhanced by global warming”!
In USA, Hurricane Katrina had devastated parts of New Orleans, Louisiana, and surrounding areas in August 2005 and was one of the costliest natural disasters in US history. According to the US Federal Emergency Management Agency (FEMA), the total damage due to Katrina is estimated at $108 billion, with nearly 570,000 vehicles damaged beyond repair.
Hurricane Sandy (unofficially referred to as “Superstorm Sandy”) in October 2012 was the second-costliest hurricane in United States history, with current estimates of damages in excess of $75 billion. It is estimated that Sandy damaged at least 250,000 cars in the affected areas when it hit the East Coast and states as far west as Wisconsin. Some cars sat submerged for days in up to four feet of flood waters, damaging components and leaving interiors moldy or mildewed.
The Southern states of USA were hit by another major storm few days ago – Hurricane Harvey swamping Texas and Louisiana, and as of this writing, Hurricane Irma is pounding Florida and nearby states. Industry experts estimate that up to one million cars were damaged in flooding caused by Harvey in Southeast Texas and Louisiana, many beyond repair.
After each major storm, vehicle owners and insurers need to decide how to deal with the damaged vehicles. Cars that are damaged, but are economically repairable, receive a “salvage” title that is a different colour to alert potential buyers of the fact it had been damaged.
If the cost of repairs is more than 60 per cent or so of the restored value of an older car, the insurance company might declare it totaled. It depends on the age, mileage and real-world value of the car. Vehicle owners are paid a fair market value for its prior-damage condition, less any deductibles.
Totaled vehicles that are unrepairable receive an “undeliverable” title and are sold to salvage yards for recycling and/or demolishing. “The reasons are simple,” said one insurance company’s claims manager for the region. “We don’t want our people working around those cars and we don’t want them back on the road.
Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car market, according to Jeff Bartlett, deputy editor for autos at Consumer Reports magazine.
“Fortunately, the consumer protections have improved over time, but this ongoing tragedy is a reminder for all shoppers to be vigilant and diligent when purchasing a used car,” Bartlett said. “And to factor an inspection by a professional mechanic who is not associated with the sale.”
Used-car shoppers need to keep a wary eye for vehicles that end up back on the market, some illegally. It is estimated that in 2017 more than 326,000 “flooded” cars were on American roads, and that number is sure to grow in the aftermath of recent hurricanes.
“Unfortunately, some of the flooded vehicles may be purchased at bargain prices, cleaned up, and then taken out of state where the VIN (vehicle identification number) is switched and the car is retitled with no indication it has been damaged,” the National Insurance Crime Bureau (NICB) said in a statement.
The NICB cautions that used-car shoppers need to be vigilant in the weeks and months after a major flood. The agency recommends the following steps to ensure you don’t end up with a flood-damaged used car.
• Select a reputable car dealer and use a VIN checker to ensure the car does not have a salvage title. In the aftermath of Hurricane Harvey, CARFAX has offered to check VIN’s and car history for free. (www.carfax.com/flood)
• Inspect the vehicle for water stains, mildew, sand or silt under the carpet, floor mats, headliner and dashboard.• Inspect the upholstery and door panel materials for fading.
• Check for rust around screws in the center console area and areas water doesn’t usually reach.
• Check for mud or grit in the spare tire compartment and in small crevices under the hood. Also look for rust and corrosion under the hood.
• Inspect the seat belt retractor for moisture, mildew or grime.
• Check to make sure the speakers work; door-mounted speakers will often be damaged in a flood.
• Pay close attention to the wheels; aluminum alloys may be coated in a white powder and show signs of pitting, small dimples in the material.
• Have a mechanic inspect the vehicle prior to purchasing it.
Tyres and wheels
While not specifically formulated to be waterproof, multiple layers of rubber-coated steel belts and fabric essentially do make tyres waterproof. But if a tyre has nicks or cuts that allow water to seep inside, the moisture eventually will rust the steel belts or degrade the cords, or both. Long exposure to contaminated water could also make tyres unusable. “The same detailed inspection approach should be used,” says a tyre compound engineer for Goodyear. “Let some air out the valve stem to see if any water comes out,” he said. “If any does, then you want to dismount the tyre to check it out further. If tyres have cuts or nicks or plugs or patches, it’s a good indication that water would have penetrated into the tyres upon submersion and you could have a problem with potential degradation.
“Even though tyre rims are covered with rust-resistant coating, one should check the rim thoroughly. If rust does appear, especially where the rim and tyre bead meet, you could experience air loss or rim slippage.
The bottom line, if a used car deal looks too good to be true, it probably is!