Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Nov 6, 2012

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Super-storm Sandy has come and gone, leaving massive devastation in its wake. Unfortunately for car buyers, the real damage is still to come.

One consequence of various storms and water-related disasters is the damage done to vehicles in the form of flood damage. Due to Sandy’s power, many cars across the east coast have been damaged by water. While many of these vehicles should be salvaged or scrapped, far too many of them will instead be sold to used car dealerships then resold in the coming weeks and months to unsuspecting buyers.

According to NBC, it is a common—yet illegal—practice within the auto industry to sell flood damaged vehicles to salvage yards which then sell the cars to dealerships.

In 1999, Hurricane Floyd destroyed or damaged 75,000 vehicles. Half of these were sold despite most of their engines having been fully submerged underwater.

While the federal government has taken steps to prevent totaled vehicles from being sold, the sale of flood damaged cars still remains a common practice among unscrupulous businesses.

According to CarFax, a massive 600,000 cars were damaged by Hurricanes Rita, Katrina and Wilma in 2005. It is likely that Sandy—despite being a “super-storm” and not a hurricane—has done comparable damage, if not more.

Borrowers are recommended not to obtain an auto loan in order to purchase a possible flood damaged car. In the event that borrowers do make the mistake of borrowing auto loans in order to buy flood damaged vehicles, then not only will they be in debt but they will also be the owners of a potentially hazardous and unsafe vehicle.

Auto loan borrowers and prospective car buyers are advised to check for water condensation, musty odors, mold, mud, interior water damage, sagging headliners and corrosion.

East coast auto loan borrowers and car buyers are not the only ones at risk of purchasing a flood damaged vehicle. Since the illegal practice of title washing involves transporting a vehicle across the country in order to “wash” away records, it is likely that some flood damaged cars will be sold across the country. This makes it even more important for buyers in every state to remain on the alert.