Local dealers say they steer clear of flooded cars [The Virginian-Pilot]

(Virginian-Pilot (Norfolk, VA) Via Acquire Media NewsEdge) Feb. 12--With close to a quarter of a million vehicles swamped by floodwaters during Hurricane Sandy last fall, John Arney told his buyers to stay extra vigilant to keep any of those cars and trucks off his lot.

"It's not something we would touch," said Arney, manager of Patriot Auto Sales in Norfolk, who watches out for water-logged vehicles for six to 12 months after a storm. "We're going to exercise an additional step of due diligence." Unscrupulous sellers can take advantage of loose title laws in other states and wash away evidence that a car was soaked. The everyday car buyer is more susceptible to deception, especially when purchasing from private sellers using online forums such as Craigslist, where shadowy operators find it easier to maneuver.

Most dealers don't dabble in flooded cars and said they don't expect to see many show up for sale in Virginia.

Larger used-car dealers tend to buy their inventory through auto auctions, where flooded cars are typically identified as such. Even if they're not, or if the vehicle comes in from an individual on a trade, most dealers know a car that had been soaked when they see one.

"I can look at a car on the inside, and there's usually telltale signs that a car has been flooded," said Larry Preddy, vice president and general manager of Action Automotive, a used-car dealership in Portsmouth.

"If you put your hand on the carpet, it's brittle. If you put your hand on the leather, it's brittle," he said. "You can't mask the smell of a car that has been that wet." Most in the car business agree that flooded cars don't belong on the road.

Saltwater from storms like Sandy is particularly harmful to a vehicle's electronic parts. And while the vehicle may appear fine at first, continued corrosion could short out a component at any time.

"Flood-damaged cars are the one type of vehicle that we recommend nobody purchase," said Christopher Basso, a spokesman for Carfax, the company that sells vehicle history reports. "The mechanical, electrical and safety (features) could all be affected by that water. The car rots from the inside out." In most states, including Virginia, if a vehicle has flooded and an insurance company has deemed it a "total loss," the company must notify the state's Department of Motor Vehicles, which stamps a "brand" on the title indicating that. Virginia also requires insurance companies to report when they pay a claim costing at least $3,500 for water damage to a vehicle.

Most of the cars that flooded during Hurricane Sandy would have been covered by insurance. New York and New Jersey, where some of the worst flooding from the storm occurred, require that an owner carry liability coverage for any vehicle on the road, whether they drive it or not.

A branded title sticks with the vehicle identification number and will usually show up on that car's history report, even if the car moves from state to state. Car buyers can pay for a service such as Carfax or AutoCheck, which allow them to search by VIN for information gathered from title and registration documents across the country.

The Virginia DMV uses the National Motor Vehicle Title Information System, which collects data from departments of motor vehicles in 41 states that have agreed to provide it, before issuing a new title, so it will find a brand that was placed on a title in another state -- as long as the VIN is the same.

An owner of a soaked car, however, might not file an insurance claim. And that's the first crack in the dam blocking a flooded car from floating unidentified back into the marketplace.

That owner could get that car refurbished and try to sell it. A buyer with an untrained eye might not realize the car was flooded.

Or, the owner might sell it to a dishonest buyer. A few states don't require branded titles. That buyer could take a cleaned-up car to one of those states and retitle it there, then bring it to Virginia or any other state to sell it -- indicating nothing of its saturated past. This practice is called "title-washing." In some cases, con men have altered branded-title documents or create fake ones and use them to register for a new title, said Basso, of Carfax, which is based in Centreville. "They're trying to hide the trail of that vehicle." Even vehicles sold with proper disclosure at an auto auction can eventually end up being title-washed, he said. "The problem happens after one or two people get their hands on that car after it's auctioned." Professional cleaners can cover signs of flooding, he said. "They're able to mask smells. They're able to clean up the car and get it detailed to the point that flood damage isn't obvious to the untrained eye." These cars aren't likely to show up in used-car lots, where dealers would detect them. They'll appear on Craigslist or a for-sale sign on the side of the road.

"These are organized crime rings that target flood vehicles that show few signs of damage," Basso said. "You want to be wary of someone who's trying to make a quick sale." Carfax offers a free search for flood-damage information, which includes whether a vehicle was ever registered in a location that the Federal Emergency Management Agency declared as a disaster area.

"That's one of the reasons to buy from a licensed dealer," said Mike Duman, who owns used-car dealerships in Suffolk and Franklin. "If you're not buying a car from a dealer, you should not pay in advance until you have that title." After Sandy and other storms, most flooded cars are sold to salvage yards for sheet metal or body shops for parts, he said.

But some auto parts dealers don't want to deal with a deluged vehicle, either. Cars have so many electronic parts that won't work once wet, said Robert Ingram, owner of Ingram Auto Parts in Norfolk.

"We crush that car," said Butch Scheuer, Ingram's manager," because all you're going to have is a nightmare." Duman said he believes few flooded cars find their way to Virginia buyers, because technology has made them much easier to track.

"We're not going back 40 to 50 years ago, where we don't have the records we have now," Duman said. "Not that it can't happen." Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com ___ (c)2013 The Virginian-Pilot (Norfolk, Va.) Visit The Virginian-Pilot (Norfolk, Va.) at pilotonline.com Distributed by MCT Information Services

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