In our society, there's always going to be dishonest people who take advantage of devastating situations, case in point, deceitful dealers and wholesalers who'll push flood-damaged cars through the system.

"The National Automobile Dealers Association estimates that 250,000 vehicles will be scrapped due to Hurricane Katrina damage," says Javier Sanchez of Central Ford Lincoln Mercury in South Beloit.

Here's how the process works, "Vehicles are scrapped. They are sometimes purchased by people who will recondition the vehicles, clean them up--new upholstery, new carpeting. Then they get titles issued to them, and then put the cars back in circulation in the market," says Sanchez.
Cars damaged by Katrina might work properly for a while, but problems created by salty water are sure to set in, including corrosion of sheet metal and wiring, mold and rust could also plague the safety restraint system and compromise electrical sensors and airbags. Javier Sanchez of Central Ford Lincoln Mercury in South Beloit says there's no national standard for titling laws, potentially drenching the market with problems.

"Because of Internet buying practices, you can buy a car from a private party, but who are you buying from--it's wide open for fraud," says Sanchez.

So how do we protect ourselves from flood damaged cars? Sanchez says, always buy from a reputable party, do a vehicle background check yourself, self inspect the vehicle--looking for water marks and new upholstery, and have the vehicle inspected by a dealership.

And Sanchez's best advice, "If it's a deal that's too good to be true, I think you should maybe look at it and think that it may not be as good as it looks," says Sanchez.

Carfax is offering free flood checks for consumers buying a used car. Visit carfax.com for more information.