Buying or selling a vehicle soon after a natural disaster may be challenging, and you should be aware of risks on both sides of the transaction.
Vehicle risks after severe weather
Floodwaters can do irreparable damage to cars. Internal mechanics and electronic systems can be ruined, along with the car’s seats and floors. It’s a serious problem for current owners and can lead to future problems if the owner wants to sell the vehicle. Vehicle damage from a natural disaster can cause difficult circumstances for both seller and buyer.
Sellers have to deal with insurance hassles and disclosures, whereas buyers have to worry about being sold a vehicle that may have sustained significant but hidden damage. This guide will help buyers and sellers both understand issues with storm-damaged vehicles and how to plan accordingly.
Why buyers should beware
The unfortunate truth is that unscrupulous used car salesmen can make money from selling a vehicle that’s been through a natural disaster without telling potential buyers about the underlying damage. It’s common practice for vehicles that have endured natural disasters, such as flooding, to be relocated to other areas of the country and sold for a much cheaper price to unsuspecting buyers.
The used-vehicle reporting service Carfax describes the phenomenon this way: “For a few shady characters, [natural disasters] only inspire them to do their worst, whether it’s price-gouging on immediate essentials or preparing flood-damaged cars for a larger, more lucrative scam.” For instance, after a vehicle suffers damage from a natural disaster, about half of them will resurface in the pre-owned marketplace. Carfax explains further, “It’s surprisingly easy for them to make a few quick, cosmetic repairs to hide the obvious marks of flood damage.”
Now, consider the fact that Hurricanes Irma and Harvey damaged 1 million cars. If the estimation proves true about their eventual reappearance in used car lots, then potentially half a million American car buyers need to know that the cars they’re looking to buy may have endured damage from a natural disaster.
In actuality, the number of vehicles on the road that have been “title washed” could be even higher.According to Wired, a study found almost 800,000 cars on U.S. roads had been title washed, and nearly 650,000 of those vehicles were flood-damaged or designated for salvage.
The situation is further complicated by uninsured drivers. Even though all motorists are required to purchase car insurance, a study found 13 percent of all U.S. motorists were uninsured in 2015. These individuals are often desperate to replace their vehicles, so they risk buying cheap cars and driving them without insurance. When people are willing to buy vehicles with no questions asked, it’s easier for unscrupulous salesmen to sell a damaged one. This puts everyone on the road at risk.