How Will Flood-Damaged Vehicles Impact the Used Car Market?
This hurricane season has been one of the worst in recent memory. And over the past few weeks, we have seen the devastation Hurricanes Milton & Helene have left behind in the Southeast. Based on early estimates, the combined impact of 2024 storms will further push total insured losses in Florida alone to over $100 billion for the fifth straight year.
The aftermath of these storms is going to take a tremendous toll on the federal and state economies. Hurricanes hit U.S. land one on top of the other. Many people have lost their homes, their vehicles, or both. Compounding these sorrows is the sad reality for victims that may find out that insurance doesn’t cover their losses. In Florida, two-thirds of people in flood zones either do not have insurance or do not have the comprehensive coverage needed to pay for flood damage.
Like most of the stuff in our lives, we can sometimes take our cars for granted. But, what if you woke up tomorrow and your vehicle was totaled by flood waters? Even worse; you didn’t have the comprehensive insurance coverage needed to pay for the damage or replace your totaled vehicle? An estimated two-hundred-thousand people have found themselves with a totaled vehicle and without the necessary insurance to repair or replace it.
A HUGE Number of Flood-Damaged Vehicles Will End Up Back on the Road
According to CarFax, approximately 347,000 vehicles have flood damage from the 2024 hurricane season. Thousands of those cars will be filtered back into the marketplace over the next year, and they will be sold all over the country legally. Many will be purchased for salvage, stripped down and sold for parts. However, an alarming number of these totaled vehicles will be repaired with a flood, salvage or rebuilt title and will end up back on the road.
A vehicle with a flood, salvage, or rebuilt title has a significantly lower value than similar vehicles with clean titles. Most of us wouldn’t trust a vehicle that was previously totaled and whose title isn’t clean. Especially with flood vehicles, as they often have electrical/mechanical issues and may even have hidden mold that can cause health problems. It’s not illegal to sell a vehicle with a salvage, flood or rebuilt brand on the title, but any attempt to doctor or cover up a vehicle’s history is illegal.
Nevertheless, after we experience natural disasters there are thousands of scam artists who come out of the woodwork looking to purchase flood-damaged vehicles that have been totaled by insurance companies. According to one study, it was found that about 650,000 of the nearly 800,000 title-washed vehicles on the roads are flood-damaged/total loss vehicles!
How Flood-Damaged Vehicles are Re-sold to Unsuspecting Buyers
Most of us have never heard of Title Washing. What is title washing? Title washing is when scammers will purchase flood-damaged and flood-totaled vehicles dirt cheap, then spend a few dollars to cover-up any major signs of flood damage. They will register the vehicle in a state with looser title laws, thus removing the flood-totaled brand from the title. Now, the vehicle has the appearance of a clean vehicle with a clean title. The scammer will then turn around and sell the vehicle to an unsuspecting buyer for full value. The new owner is now driving around in what is potentially a dangerous vehicle, and/ or a vehicle that may cost them thousands in repairs. If you’re reading this, rest easy! There are a number of ways to uncover flood damage.
How to Avoid Being Scammed into Buying a Flood-Damaged Vehicle
There are plenty of signs a vehicle has been flood-damaged. Many of these signs can be covered up with a little work, but there are a few tell-tale signs that shouldn’t be ignored. The infographic below could arm you with the information you need to avoid becoming a victim.
Statistics
Fitch says Hurricane Milton will push 2024 insured losses over $100 billion https://www.reuters.com/business/finance/fitch-says-hurricane-milton-will-push-2024-insured-losses-over-100-billion-2024-10-10/ Hurricanes refocus attention to scarcity of flood insurance in high-risk Florida https://www.theguardian.com/us-news/2024/oct/11/florida-hurricane-milton-helene-flood-insurance#:~:text=An%20estimated%2035%25%20of%20homes,to%20one%20in%20five%20residences. CARFAX: 347,000 Cars Flood Damaged in 2024 Hurricanes https://www.prnewswire.com/news-releases/carfax-347-000-cars-flood-damaged-in-2024-hurricanes-302284543.html Buying or selling a car after a disaster https://www.thezebra.com/resources/driving/buying-selling-after-disaster/#:~:text=Carfax%20explains%20further%2C%20%E2%80%9CIt’s%20surprisingly,on%20the%20road%20at%20risk.
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Tips for Selling a Junk Car
Selling an older, high mileage or damaged vehicle can present many unique problems. Here are some Tips and Suggestions for getting cash for junk cars.
Beware of the Trade-In Trap
Buyers often get stuck between a rock and a hard place, rushed into a ‘trade’ thinking its the only option available. If your car has hit the end of the road, the dealer likely has no more interest in it than you do. The offer you get for the vehicle is often inflating the sale price or being used as leverage to sell financing. If possible, get the most money for your junk car before you buy another. If you’re looking for more guidance click here to avoid the ‘gotchas’.
Don’t take the quick computer offer
Many sites or services on the web ask owners to input the year, make, model, and mileage for an ‘instant offer’. Don’t get fooled by the quick offer, these operations are likely just baiting the user. Many of these sites are simply set up to sell ‘leads’ to local junk yards, and their ‘services’ deteriorate your returns. If you’re getting an instant value they likely aren’t taking into consideration the true condition or the many options that influence value. They will either make a low offer or negotiate when the rep shows up to pick up the car. You Call We Haul™ connects buyers and sellers without the trickery.
Get to a LOCAL buyer you can trust.
If you are selling a high mileage, end of life, salvage or damaged car, it is likely to be sold to a local recycler or dismantler. There is no National chain or clearinghouse to buy junk cars. Get to know your local junkyard, they are an important part of the recycling world and help keep our driveways, cities and streets clean. Sites that resell ‘leads’ often work with dubious buyers that you may not want showing up at your house. You want a recognized, local bidder who you can rely on to handle the transaction in an ethical manner. You can learn more about responsible automobile recycling at United Recyclers Group or Automotive Recyclers Association websites.
Take Photos to maximize the value
Even though you are selling an older or salvage vehicle, don’t expect to get top dollar without giving the right information to maximize return. Take photos of the vehicle, because it’s the easiest way to get the very best bid from a local dismantler. You can use our quick and easy photo app here:
Be ready to move quickly
You Call We Haul™ offers a fast alternative to making several calls. Once we get your photos and information we send them off to our network of dismantlers and recyclers and they are often returning real bids in just minutes. Make sure to have all of your personal effects, license plates, and registration ready for a quick removal if you accept the offer.
Carefully transfer your title
Don’t get lazy about title transfer. Often times when selling an older car, owners skip the appropriate title steps. Make sure to sign the title directly over to the buyer picking up your vehicle. Be assured that all of our buyers are properly licensed and insured. Click here for more information about transferring your title.
RELAX
Though this process can seem intimidating, we’re here to help. We have over 10 years experience and have sold hundreds of thousands of cars, trucks, motorcycles and SUVs to recyclers and dismantlers. We know how this world works and we’re here to make it easier on you.
You Call We Haul™ – We Got You
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