PhotoThe devastating floods in Louisiana last month raised alarms about the potential for previously submerged vehicles hitting the used car market. Such concerns arise after every major flooding event.

But in reality, it isn't just these high-profile floods consumers have to worry about. New research from vehicle data company Carfax says there were already hundreds of thousands of flooded cars on the road before Louisiana ever saw a drop of rain.

The company estimates that more than 271,000 vehicles that have been damaged by flood waters are back in use – 30% more than in 2013, the year following Hurricane Sandy. Carfax bases its estimate on a review of data from states' department of motor vehicles and insurance companies.

Worst nightmare

"Flooded cars are a buyer's worst nightmare," said Larry Gamache, communications director at Carfax. "They're ticking time bombs because when you least expect it, the electrical, mechanical or safety systems on these cars will fail, often without warning.”

In addition to saddling the owner with unending repair bills, a flooded car can pose safety risks to its occupants, and even people in other vehicles.

Selling a flooded car without disclosing the car's status on the title is against the law everywhere, but that doesn't stop the transactions. These damaged vehicles can be acquired for pennies on the dollar after an insurance company declares them a total loss.

Many are sold in private sales, but a distressing number end up on fly-by-night used car lots, sold to unsuspecting consumers.

"A customer was requesting a loan on a used car, so we ran a Carfax report as part of our underwriting procedures," said Willie Macko, President of PriorityOne Bank in Mississippi. "We discovered that the car had been a total loss and the title was branded as a flood vehicle.”

Texas has the most

According to Carfax, consumers in Texas need to be especially vigilant. It estimates 43,000 flooded vehicles are still in use in that state. Pennsylvania has an estimated 20,000 flooded cars while Florida has 17,000.

There are several red flags that can be a tip-off that a car has spent time underwater. There is often a musty odor in the interior and in the trunk. Look for signs of rust on bolts and other metal parts. Some of the electrical components might not work.

Carfax, meanwhile, offers a free “flooded vehicle check” where consumers can find out if a vehicle has been reported as flooded to an insurance company or DMV. You can access it here.


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