Hurricanes could hurt California used car buyers due to 'title washing' flood-damaged cars

Michael Finney Image
Tuesday, October 25, 2022
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Californians should be on the lookout for used cars coming from other parts of the country that might have flood damage. Here's what to look for.

SAN FRANCISCO (KGO) -- When looking at Hurricane Ian's devastation, we tend to focus on lost homes and neighborhoods, but look closer and you will see there are plenty of lost cars, too.

"There are thousands and thousands of these cars right now, sitting in lots that will be auctioned off," says John Pearley Huffman, automotive journalist and senior editor at Road & Track Magazine. "They'll end up all across the country. They will end up wherever the market takes them."

Here in California, there isn't much flood damage awareness among California car shoppers. Fortunately there is a consumer protection law that brands flooded vehicles.

"They will get a salvage title," Huffman says. "The insurance company will ensure it has a salvage title. A salvage title is the -- I always call it the scarlet mark of automotive marginalization. It means that the car has been declared a total loss by an insurance company at some point in time."

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However, the bad guys are always working the system.

Ivan Drury is Director of Insights at Edmunds, the car information firm.

"One of the easiest ways for people to circumvent that issue is to sell the vehicle in a different state," says Drury.

Drury says the process is called "title washing." That's where the car ends up with a title that does not say "salvaged."

Then there are the flood-ruined cars that are never part of the title branding system.

"Now the problem is that some cars were not insured or uninsured. So the insurance companies didn't declare the total loss. So those cars are where the danger lurks," says Huffman.

When 7 On Your Side asks if cars for sale "could have been a car that was wrecked and sold without an insurance company being involved, and now it's flooded without an insurance company being involved, and that's what's going to end up here at my local lot"?

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John Pearley Huffman says: "It could. Theoretically."

So Edmund's Drury says be on the lookout when shopping.

"The number one thing that you're going to find: the price. If it's too good to be true, it probably is," he says.

That applies to miles on the odometer, too. Low miles?

"Why? Because it's been in the repair shop for a while, and it hasn't been driven for months," he says.

Electric cars have been among the most seriously damaged. Video of Teslas on fire are all over the local news in Florida.

Pete Gruber is CEO of Gruber Motor Company touted as the first commercial, independent Tesla service organization.

He tells 7 On Your Side: "Most likely the reason is salt water has migrated into the battery pack, which is normally sealed fairly well. But if you get water inside a propulsion battery pack you can get rapid corrosion which results in resistance."

Which can result in fires. Experts say all electric cars are potential hazards that can catch fire long after the flood waters have receded.

Always check a used car's title before buying, and also have a mechanic inspect the car.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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