After the hurricanes, watch out for the flood of damaged cars on the market

First there were reports of price gouging during hurricanes Harvey and Irma - store owners charging up to $99 for a $10 case of water, for instance. Then the FBI began warning about fake charities soliciting money for hurricane victims and absconding with the funds.

Now, get ready for what could be the most consequential scam of all: an unprecedented flood of water-damaged vehicles coming soon to a car lot near you.

A warning issued last week by AAA Mid-Atlantic and the National Insurance Crime Bureau noted as many as a million vehicles may have been damaged by the hurricanes that hit Texas and Florida, and that "many of those vehicles . . . may soon end up for sale in other parts of the country, all the way up to the Washington (D.C.) metro area."

The Washington Area New Automobile Dealers Association issued an alert, too, that "dealers should watch out for flood-damaged cars at auction." 

But it's the buyers who really need to watch it. You don't just lose money on purchasing a defective car. Driving a car that has corroding brakes, rusty steering and blow-dried electronic systems can cost you a life.

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The region already has some of the most dangerous driving conditions in the country. A survey by WalletHub in July ranked us 97th out of 100 when it came to traffic safety, access to vehicle maintenance and the cost of repair. The last thing we need is an influx of defective cars.

Moreover, the demand for used cars continues to increase as the region's population grows. College students, immigrants and entry-level employees are among the used car seller's best customers. They also tend to be the least experienced when it comes to buying and driving a car.

The damaged vehicles are expected to start hitting the Washington, D.C.-area market within two months, if not sooner, according to AAA. These are the cars that you saw in television reports, the ones in parking and car dealership lots, beneath highway overpasses, overturned in canals. The ones in high water can be infested with insects, reptiles and rats and contaminated with toxic chemicals and even raw sewage.

"Once the deluged autos are meticulously dried out, scoured and scrubbed, and the title is 'washed,' they are sold in other states by unscrupulous sellers and fly-by-night operators," said John Townsend, AAA Mid-Atlantic's manager of public and government affairs.

A title is supposed to indicate whether the vehicle has been flood damaged - meaning it had been submerged in water deep enough to cover the engine. When a title is "washed," that critical information gets deleted.

Insurance companies generally declare such vehicles a total loss and give their customers a modest payout. But in the Houston area, where an estimated 1 out of 7 vehicles was damaged by Hurricane Harvey, at least 25 percent of the owners did not have comprehensive insurance that covered such damage.

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Any compensation they receive will most likely come from selling the car to a salvage company, which may clean it up just enough to put up for auction. 

"The cars will turn up at auctions, where all you have to do is raise your hand to place a bid," Townsend said. "It's like getting married without knowing anything about your fiance."

AAA recommends prospective buyers obtain a CARFAX Vehicle History Report. "This can reveal if a vehicle has been involved in a flood, major crash, fire or uncover odometer fraud," Townsend said. "Be sure to check for anything coming out of Florida or Texas."

The Washington Area New Automobile Dealers Association suggests checking the car for telltale signs of flooding, such as "water stains under the carpet," "rusted components, water residue or suspicious corrosion in electrical wiring" and "a musty odor in the interior sometimes covered with a strong air freshener."

As we have seen time and again, disasters can bring out the best in us. Yet, for every act of heroism and generosity there seems to be a corresponding display of greed and deceit. 

When it comes to the flood damaged car scam, Townsend said, "Let the buyer beware."


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