When the floodwaters recede, they often leave behind damaged cars, and that's where trouble can begin for used-car buyers. After the owners of damaged cars settle up with their insurance companies, vehicles are sometimes refurbished and resold. And sometimes, a middleman buyer intentionally hides a car's history as a flood-damaged vehicle through a process known as "title washing" and sells it to an unsuspecting buyer in a state unaffected by the disaster. Electrical and mechanical problems can potentially surface later — long after the seller is gone — leaving the new owner with an unreliable car and no recourse against the seller.

Severe floods have affected several regions of the U.S. in recent years, including the devastation brought by Hurricane Harvey in Texas and Hurricane Irma in Florida in the summer of 2017. Estimates of the number of cars flooded by Harvey vary widely, with some sources putting the number of cars potentially lost at 500,000. Hurricane Florence, which struck North Carolina and South Carolina in September 2018, damaged fewer cars. Vehicle valuation company Black Book estimates that flooding destroyed 20,000 vehicles.

Sometimes, a middleman car buyer intentionally hides a car's flood-damage history through a process known as "title washing."

Sometimes, a middleman car buyer intentionally hides a car's flood-damage history through a process known as "title washing."

After the insurance process is over, state motor vehicle registries "brand" the flood-damaged cars with a salvage or junk title. These alert future buyers to the fact that the car was declared a total loss by an insurance company. Some states specifically call out flood damage in the title, alerting possible buyers to the fact that the car sat in water deep enough to fill the engine compartment.

Roughly half of the vehicles with salvage titles are resold, often in places unaffected by flooding. You're more likely to find private parties selling flood-damaged cars than dealerships. Reputable dealers use vehicle history reports to check cars they buy so they can avoid the headaches that come with reselling flood-damaged cars.

Check the Vehicle's History

If you suspect that a used car you're interested in buying might have been flooded, proceed with caution. Get a vehicle history report, which will detail the car's past, including the states in which it's been registered. It also should reveal any title branding for flood damage, even if a middleman has washed the vehicle's title by moving it through states with differing regulations.

A good, low-cost starting point is the free flood-title check from Carfax. It will only answer whether the vehicle had flood damage reported, but it also provides a link that will let you buy the full-fledged vehicle history report. The National Motor Vehicle Title Information System, operated by the Department of Justice, has a number of reports you can buy from third-party companies, but they do little beyond what the free Carfax check provides. Your money is better spent toward the purchase of a full report from either Carfax or AutoCheck. And as with any used-car purchase, you'd be wise to have a mechanic check out the car.

How to Spot a Flood-Damaged Car

In some cases, flood damage might not show up on a vehicle history report. If the owners of the flooded vehicle didn't have comprehensive insurance coverage, they wouldn't have been able to file a claim, and so the car's flood damage isn't indicated on the title. The owners just sold the car, and now it's worked its way back onto the market. In the absence of a history report, you might have to rely on some clues to flood damage. They include:

1. Unusual odors inside the car. Musty or moldy odors inside the car are a sign of mildew buildup from prolonged exposure to water. The mildew might be in an area the seller is unable to completely clean. Beware of a strong smell of air freshener or cleaning solution. It may indicate the seller is trying to cover up something. Run the air conditioner to see if a moldy smell comes from the vents.

2. Discolored carpeting. Large stains or differences in color between lower and upper upholstery sections may indicate that water stood in the vehicle. A used car with brand-new upholstery is also a warning sign. The seller might have tried to remove the flood-damaged upholstery altogether.

3. Exterior signs of water buildup. Signs may include fogging inside headlamps or taillights and damp or muddy areas where water naturally pools, such as overhangs inside the wheelwell. A water line might be noticeable in the engine compartment or the trunk, indicating that the car sat in standing water.

4. Rust and flaking on the undercarriage. You would not usually find either on a newer vehicle.

5. Dirt buildup in unusual areas. These include areas around the seat tracks or the upper carpeting under the glove compartment. Have an independent mechanic look for caked mud or grit in alternator crevices, behind wiring harnesses, and around the small recesses of starter motors, power steering pumps and relays.

If you suspect a local car dealer is committing fraud by passing off a flood-damaged car or a salvaged vehicle as an undamaged used vehicle, the Federal Trade Commission recommends that you contact your auto insurance company, local law enforcement agency or the National Insurance Crime Bureau at 800-TEL-NICB (800-835-6422).

Of course, the best advice when trying to avoid a flood-damaged vehicle is the adage you've heard so often: If a deal seems too good to be true, it probably is.