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How to Price a Storm Flooded Car

By | Published April 2, 2013

People email us here at CarBuyingTips.com asking how much they should pay for this used car they are looking at that was disclosed to have a flooded title. To answer this question, today I'll flood you with all sorts of pros and cons. The more important question to ask is should you buy that car with a branded title? How do we determine what a flooded car is worth?

What is a Flooded Car?

used camaro

The storm of the century Hurricane Sandy slammed into New Jersey and New York flooding tens of thousands of cars. Here in Florida, one of our state pass times for some inebriated drivers is to veer off the road and drive into the canal alongside it. Those cars, like any other rising water damaged vehicles, have to go somewhere. These flooded cars become a total loss, written off by insurance companies. Their titles must be branded as "Flooded" by law so any future buyer will know the car was a complete loss, and not get ripped off. Then these cars with branded titles are sold at special salvage auctions, because mainstream buyers don't want them or the risk.

There is an industry of people who take cars with flooded titles, and repair them enough to launder the title back to used car status. Thanks to companies like AutoCheck, you can get a vehicle history report which we recommend on every used car before you buy, and it tells you that the car you are about to buy was flooded. It also shows previous sale dates so you can tell what state it was located and how it sold. You'll often see flooded cars get moved several states away to be sold out of site out of mind from ground zero.

Should you buy a car that was flooded?

Suppose you see a used Honda Accord ad that fully discloses it was previously flooded. The car might work great now, but there could also be areas of trapped moisture, or hidden corrosion could have set into printed circuits of the computer control modules under the dash. They work fine now, but two months down the road the corrosion causes failures, and there's no warranty, no undo button, no safety net. Corrosion can start 24 hours after water intrusion, and you have wet nooks and crannies. What if expensive oxygen sensors are compromised? We don't know everything that was done to repair this car. Sensors are $500 when they fail. There are pros and cons that depend on your financial condition. There's a lot of risk and sometimes the selling price is not as low as you would expect. Most people don't want flooded vehicles; you will have hard time reselling this car later. Who should buy one and who should not buy one?

You could buy a flooded car if:

You should not buy a flooded car if:

How to Determine the Right Price to Pay

CarBuyingTips.com formula:

Market Value - 25% Flood Depreciation - $2,000 Future Repairs = Right Price

We all have our own definition of a good price, there is no standard for pricing in this category of cars, so here's mine: I think you should plan for $2,000 of future repairs related to the flood to be built-in to the price. Suppose a used Lexus you want to buy is worth $15,000 a flooded one should be 25% less, then another $2,000 lower to allow for repairs.That flooded Lexus should sell for $15,000 - $3,750 -$2,000 = $9,250. We are predicting the future; will I see failures related to the flood after I buy this car?

If the dealer or seller rejects your offer, then reject the purchase. They can keep the car; no one else thought it was a good deal either. If it was, you can bet the car would not be available for you to buy; it would have sold long ago. Treat it like any other used car, with extra scrutiny by the mechanics inspecting it.

We always tell buyers to get a vehicle history report, which also shows you when they took ownership and how long the seller has been sitting on that car. But you also must make sure to have your own mechanics look underneath where you can bet the dealer has not ventured. Remember, they only doll up the areas of the car you can see, like putting lipstick on a pig. Pull up floor mats, look under trunk and spare tire area for rust. Look at the bottom of the engine from underneath on a lift. Have a computer plugged into the engine and run the standard list of engine checks; make sure water has not affected any aspect of your engine. Have them open the dash and pull out computer modules and look for corrosion.

Look on eBay Motors for "completed" auctions on your car to determine the real market value. This proves what the market is willing to pay for your car right now. Then apply our formula of deductions above to reduce the price. On fixed price AutoTrader, dealers typically ask $3,000 over market value as they try to get retail value. But eBay has already established what a good specimen of your car is really worth.

Often the seller is living a pipe dream if he thinks the car is worth the asking price, no matter how much they put into it, a flooded car is never worth nearly as much as a non-flooded car.

If you have to resell this car later, 90% of your potential market is gone; it has a flood in the past, so you will see depreciated value.

Another thing to consider is when was the car flooded? When was it repaired? This is where the history report comes in handy. The longer the car has been in operation since the flood, the better for you; because it shows the car has not suffered issues that might have surfaced by now. Be sure to let us know how you did buying your flooded car.

Author Jeff Ostroff

About The Author: Jeff Ostroff is a consumer advocate, Founding Editor and CEO of CarBuyingTips.com overseeing a team of expert authors. For over 17 years, he's been the recognized authority on car buying, leasing, used cars and financing. He developed sophisticated spreadsheet tools to help consumers negotiate on a level playing field. He is a widely sought out guru, cited by the press for his expertise in savvy car buying and preventing consumer scams. Jeff has been quoted in CNN, Bloomberg, MSNBC, Wall street Journal, Consumer Reports, NY Times, Reader's Digest, and many live call in radio shows. He has covered the automotive space since 1997. Jeff also has extensive experience and expertise in selling used cars for clients on eBay and Craigslist. Connect with Jeff via Email, Twitter or on Google+.

CarBuyingTips.com has affiliate referral relationships with multiple web sites. This means that for many of the links you see on this site, we are paid referral fees for leads generated from visitors that click on links or fill out forms on this site. In some cases we are paid a commission for a purchase made on a site that is linked to from CarBuyingTips.com. Please view our advertising policy page for more information.