5 On Your Side: What happened to cars flooded during Hurricane Helene?

5 On Your Side tracked some of the estimated 23,000 vehicles
that flooded in North Carolina during Hurricane Helene. To better protect you, our team wanted to follow the process
these cars go through after being flooded and learn how scammers conceal damage
from unsuspecting buyers.

Flooded cars: What should happen

When a car, truck or SUV is flooded, its title should be branded
as being flood damaged. 

That process can happen in a few ways.

One option is the vehicle owner makes a claim with their
insurance company. The claim is paid out and the owner keeps the vehicle. The
insurance company then sends the North Carolina Division of Motor Vehicles (DMV) something called an MVR-4C form telling
the DMV the owner is keeping the vehicle. The vehicle owner would then need to
go to a DMV plate office and complete a title correction.

Another option is the vehicle owner does not make an
insurance claim. The vehicle owner can then sell the vehicle if they disclose
that the vehicle has been flooded and that the title will be branded
waterflood. The brand would link to the title when the vehicle is registered by
the new owner.

The vehicles 5 On Your Side tracked went through the second
process.

What did happen

The physical titles of four vehicles tracked by 5 On Your Side were marked as
flooded, and the flood damage was disclosed to potential buyers in a public
auction.

Three of the vehicles, a Toyota Camry and two Chevrolet
Equinox SUVs, were sold and registered with the DMV. It took a few weeks, but
vehicle history reports were updated to show the flood damage on each vehicle.

The fourth vehicle, a Chevrolet Traverse, has not been
registered with DMV four months after being sold. Vehicle history reports
that 5 On Your Side checked do not show the vehicle has been brand as flooded
and it has not been registered anywhere.

Why this matters

Unfortunately, there are opportunities for scammers to get
these vehicles, conceal the damage and title brands, then resell them
to unsuspecting buyers. 

“There could be a scammer that takes a water damaged car to
a state that has a more lax title branding and reporting standard,” explained
Em Nguyen, Director of Public Relations at CARFAX. “And when that happens, it
could result in what is a clean title, or what many call, of course, title
washing.”

Nguyen said scammers will clean up flood cars for a few
hundred bucks, then sell them for thousands more than they’re worth. 

“These cars, even with minor damage, could be a ticking time
bomb, because first you have to think about the cost. Even a little bit of
water damage can lead to electrical issues, and fixing it can be very costly.
Of course, if you get a little bit of water in the engine or the oil system, it
can really wreck the engine,” Nguyen said.

And the signs of a problem can be hard to spot.

“It looks showroom fresh, but it is rotting from the inside
out,” Nguyen told 5 On Your Side. “That becomes a big headache for the
unsuspecting buyer who then purchases it.”

Nguyen warns this could happen with any flood damaged car.

What can you do?

So, how do you protect yourself from being scammed?

“If you are engaging in a private sale of a vehicle, you
should go to the DMV. You’re trying to find MVR-181, that’s a disclosure
statement that any party can pull down, and the two parties can then sign that
the buyer and the seller,” explained Landon Bentham with Callahan and Rice
Insurance. “And right on that form, it asks if the car was flooded.”

Bentham said it’s a good idea to ask sellers to fill out and
sign that form and be wary if they won’t.

“[It’s] definitely a red flag if they will not sign the disclosure
form,” he said.

You should also look for these signs that a car has been
flooded:

• Does the interior smell really bad or really good like the seller is trying to cover up an odor?

• Is there rust or corrosion under the dashboard?

• Is the carpet stained?

• Push every button, open every hatch, drop every window to
  make sure electrical components are working as they should. 

“If something doesn’t function, that would be another red
flag that you should consider,” Bentham warned.

Finally, get a pre-purchase inspection from a good service
shop. It costs $100 to $200 but could save you thousands in the long
run. 

If you want to learn more about a specific vehicle’s past, the
National Motor Vehicle Title Information System is an electronic system that
provides consumers with valuable information about a vehicle’s condition and
history.

Some of the providers offer free reports to the public, some
require payment.