5 Ways to Spot a Car Damaged by Hurricane Sandy

NEW YORK ( TheStreet) -- Hurricane Sandy damaged more than 250,000 automobiles when it slammed into the Eastern United States six months ago, and experts fear dishonest sellers are still trying to soak used-car buyers with vehicles hit by the storm.

"The kind of fraud we're most concerned about is someone taking a vehicle, cleaning it up and selling it to someone unknowingly," says Frank Scafidi of the National Insurance Crime Bureau. "You think you're getting a perfectly fine vehicle, but you'll have problems with it a month or two later and have no recourse."

The NICB, the insurance industry's fraud-fighting consortium, estimates Sandy damaged at least 250,500 cars in 15 states and the District of Columbia when it hit the East Coast and areas as far west as Wisconsin in late October. Some cars sat for days in up to four feet of flood water, damaging components and leaving interiors moldy or mildewed.

While Scafidi says insurers paid to repair many vehicles and others wound up scrapped or sold overseas, the NICB suspects crooks have cleaned up some "totaled" vehicles and are selling them illegally in America without disclosing Sandy-related damage.

It is legal to sell Sandy-totaled automobiles if you disclose their stormy past. But dishonest sellers will often try to cover up problems by getting new car titles for affected vehicles -- a process known as "title washing."

Cars insurers have declared as total losses usually get words such as "Salvage" or "Junk" stamped on their titles to signal problems to anyone who buys the vehicles for scrap or rebuilding purposes; scammers will often buy water-damaged vehicles in one state, ship cars to states with lax rules and apply for new, "clean" titles.

Here are some tips from Scafidi and other experts on how to avoid unwittingly buying Hurricane Sandy-damaged cars:

Stick to reputable dealers
Storm-tainted vehicles often reach the market not through used-car dealers with permanent showrooms, but via Web-based scammers who agree to meet you at your home or in some parking lot.

"If you get a storm-damaged vehicle through a dealer, you can always go back and ask them to make it right," Scafidi says. "But if you buy one from a crook, you'll usually never see them again."

Beware of sweetheart deals
When it comes to avoiding Sandy-damaged vehicles, Scafidi recommends heeding the old adage "if it seems too good to be true, it probably is."

"If you're shopping for a 2010 Chevy ( GM) Tahoe that's normally $25,000 and someone offers you one for $13,000, a warning light should go off in your head," he says. "Usually, that's a sign that something is wrong."

Check a car's background
Both the NICB and car-checking service CarFax offer free online tools to help spot Sandy-totaled vehicles.

The NICB's VINCheck lets you compare a car's Vehicle Identification Number to the consortium's database of totaled or stolen cars.

CarFax offers a similar free Hurricane Sandy Flood Damage Check or more-extensive reports on individual cars for $40.

Such tools aren't 100% foolproof. For instance, NICB's database doesn't include uninsured vehicles and lacks information on about 12% of insured ones.

Have a mechanic inspect the car
One of the best ways to uncover a Sandy-damaged car is to have a skilled mechanic check the vehicle out, a service many garages offer for around $100.

Scafidi says merely telling a seller that you want a mechanic to inspect the car will often unmask crooks.

"If you say: 'Can I run the car over to my mechanic?' and the seller starts foaming at the mouth about how this is a limited-time deal, don't walk away -- run," he says.

Look for hidden problems
Whether using a mechanic or just checking a car yourself, a careful inspection can often uncover dirt, water stains or mold and mildew that scammers missed.

Scafidi says the trick is to look for problems in obscure places. For instance, inspect areas where the roof fabric meets the car's body. Or, check under the seats where the floor's fabric connects to the dashboard.

"You're looking for little pockets of water, dried mud or dirt residue that shouldn't be there," Scafidi says.

For a complete list of areas to inspect, go to the NICB's site and download the group's Auto Salvage Fraud checklist.

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