Thousands of flooded cars could be sold without disclosure; how to spot cars with water damage

CLEVELAND - In the wake of Superstorm Sandy, people have reached out to help their neighbors and even lend a hand from thousands of miles away. But not everyone is doing the right thing in the wake of the disaster. Scammers are using Sandy as an opportunity to pull a fast one in the car market.

For people hit hardest by Superstorm Sandy, it will take years to rebuild their homes. Sandy spared most of Ohio, but her damage will make it here soon enough, thanks to con men who will eventually start peddling cars. They may look fine in the present, but it's their past you should worry about because flood cars come with a lot of problems from.

Frank Scafidi runs the National Insurance Crime Bureau, a group created to track fraud in the industry. He said the idea of flood cars making their way to the used market isn't hype.

"We've seen this sort of behavior in the past," said Scafidi.

Scafidi said members of NICB have reported at least 50,000 VINs tied to cars damaged by Sandy. That's far fewer than Hurricane Katrina, but still significant, according to Scafidi, because a chunk of those damaged cars could be sold to people who don't know their dirty little secret.

"In a perfect world there would be disclosure and that would go a long way to preventing these problems," Scafidi told NewsChannel5.

The state of Ohio is among 32 states that participates in the National Motor Vehicle Title information system,  http://www.vehiclehistory.gov,

Ohio dealers are required to provide auto details before issuing new titles, which includes those that are junked, salvaged and flooded. However, crooked car dealers can re-title the cars in another state and "wash" the flood from the title record. Then, they resell the car.

The federal government is attempting to curb fraud with vehicle titles, although not just because of storm related issues. The National Motor Vehicle Title Information System (NMVTIS) was designed to protect people from fraud and unsafe vehicles as well as stopping the sale of stolen cars. But not every state participates, so some scammers can wipe a car's past clean.

"They can get a new title from a different state. They drop the name from salvage on it and all of a sudden you've got a damaged vehicle with a perfect title," said Scafidi.

But uncovering the imperfect past of a car takes some work because their appearances are deceiving. Chris Basso with Carfax,  http://www.carfax.com,  said with a few hours, a few hundred bucks and a few sprays of air freshener, a flood car can look brand new.

"Unfortunately it's extremely easy to clean up a flood damaged car," said Basso.

Carfax, which offers paid reports that detail a vehicle's history, offers free flood and other car damage reports. Basso said those reports may be able to help a consumer determine whether a used car was water logged, and therefore, a potential danger.

"The worst thing is it can also affect the safety system to the car, the airbag systems, the anti-lock brakes. They may not function when you need them most," said Basso.

That's why experts say before buying any used car, you need to have a trained mechanic do a thorough examination. Bill Taylor is mechanic with decades of experience and says the story of every Sandy car can be uncovered if you look for red flags.

"Things can look good from the top but underneath is a whole different story," said Taylor.

Taylor said the biggest signal a car has been through a flood is easy to sniff out.

"They can cleanse it all they want but that very first rush of the smell when you open the door, that's really a telltale sign," said Taylor.

And there are other signs to look for. Taylor said it's important to pull back the carpets and touch the area underneath, looking to determine whether it's dry or has silt and debris that's hidden by the carpet. He said the springs and bolts under the seat are another area of caution.

"They're not exposed to moisture so if they are and you see rust under there, that's the number one sign there's been water inside your vehicle," said Taylor.

Taylor said you should do a detailed exam of all the equipment under the hood as well, because although many components are designed and prepped to handle moisture, others are not.

"Look for water lines, corrosion along and inside the wheel well. Of course this area gets wet because of the rain but being submerged is another thing," said Taylor.

He also advises checking out the displays in your dashboard, where water would be difficult to remove and highly damaging to the controls. Taylor said rust under your spare tire and water marks in the fabric or insulation of your car trunk are also a warning sign.

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