Ten Tips for Spotting a Flood-Damaged Vehicle

Nearly six years ago after Hurricane Katrina, NADA provided some helpful tips for dealers to assist in identifying vehicles that may have sustained flood damage. In light of the flooding that has occurred throughout the Midwest, we felt it might be helpful to revisit some of these suggestions:

1. Check the vehicle’s title history, it may state whether it has sustained flood damage; it will certainly indicate whether the vehicle has been titled in a state that has experienced significant
   flooding;
2. Examine the interior and the engine compartment for evidence of water and grit from suspended submersion;
3. Check for recently shampooed carpet;
4. Look under the floorboard carpet for water residue or stain marks from evaporated water not related to air-conditioning pan leaks;
5. Inspect for rusting on the inside of the car and under the interior carpeting and visually inspect all interior upholstery and door panels for any evidence of fading;
6. Check under the dashboard for dried mud and residue, and note any evidence of mold or musty odor in the upholstery, carpet, or trunk;
7. Check for rust on screws in the console or other areas where the water would normally not reach unless submerged;
8. Look for mud or grit in alternator crevices, behind wiring harnesses and around small recesses of starter motors, power steering pumps and relays;
9. Complete a detailed inspection of the electrical wiring system looking for rusted components, water residue or suspicious corrosion; and
10. Inspect the undercarriage of other components for evidence of rust and flaking metal that would not normally be associated with late model vehicles.

In addition to these tips from NADA, we think it is important for dealers to use a comprehensive trade-in vehicle appraisal and inspection form.  The appraisal/inspection form will prompt your employees to ask pertinent questions: “In what state is the vehicle titled?”, “Has this vehicle been in an accident?”, “Has this vehicle ever been titled as a salvage, flood, junk, or rebuilt vehicle?”, and record the consumer’s response.  If your employees don’t ask pertinent questions, it may be very difficult to pursue a customer later for any cause of action (breach of contract, fraud).

Also review your Buyer’s Order.  Does it include a warranty by the customer that the trade-in vehicle is properly titled and has never been a rebuilt salvage, flood or buyback vehicle?  If it does, call your customer’s attention to that clause.  Give them an additional opportunity to provide you with the information you need.  If your Buyer’s Order doesn’t include this type of clause, you may want to call your form provider and discuss making some changes.

Finally, keep in mind that the Ohio BMV website (www.ohiobmv.com) allows you to check the Ohio title history of any vehicle by its VIN.  Check on the website to find out how frequently a vehicle is changing ownership and how long it has been in Ohio.  Ultimately, if something “just doesn’t seem right” take some extra time to review a commercially available vehicle history report and even consider some extra effort for the physical inspection.

Unfortunately, the vast destruction caused this spring’s flooding has the potential to magnify the problems associated with branded titles, “washed” titles, and accepting trade-ins without asking enough questions.  While no system is 100% effective, following these suggestions provides protection for dealers and consumers looking to
purchase a used vehicle.