Warning to car buyers to look out for flood-damaged cars

Thursday, 2 February 2023

Most damaged cars will have been insured, and will end up being written off by insurers.

Car buyers are being warned to check for signs of flood damage on the secondhand vehicles in the coming weeks and months.

Tony Everett from the Motor Trade Association, a lobby group for professional car dealers, said buyers should get vehicles checked by a professional for tell-tale signs they had been flood-damaged.

Thousands of cars and motorbikes were damaged in the flooding in Auckland and parts of the North Island. AA Insurance alone had more than 1200 vehicle claims, and by midday Wednesday had written off 300 cars.

That was expected to lead to a spike in demand for secondhand cars, and a surge in prices, as owners tried to use their insurance payouts to buy replacement vehicles.

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While data shows about nine in 10 car owners have insured their vehicles, some only opt for third-party, fire and theft.

That could mean hundreds of water-damaged cars were not insured as the rain started to fall.

Everett said: “While many vehicles will be written off by insurers, some won’t, and others won’t have been insured at all.”

He said some people would be trying to offload flood-damaged cars.

“Flood damage can sometimes be difficult to determine, and it may take time before problems show up in the form of electrical failures and corrosion,” Everett said.

Some sellers might not realise what damage inundation could do to a vehicle.

“People selling privately may be unaware of the true extent of damage to their vehicle,” he said.

The MTA recommended people buying secondhand cars get them checked by professionals.

Richard Wafer, chief operating officer at My Auto Shop, which is part-owned by TradeMe, and does pre-purchase vehicle inspections, said key giveaways a vehicle had been flooded included a musty smell from waterlogged carpets, seat fabric and foam.

VTNZ does pre-purchase inspections for customers who want to be sure they are not buying a lemon.

There could be water marks on upholstery, and evidence of water inside the foot well, specifically around the pedals.

“This can appear as early signs of rust spots,” he said.

Similarly, water marks in the spare wheel well could be a sign.

Rusted seat mounts, and other signs of rust forming were worth checking for, he said.

“We can run a diagnostic scan of the vehicle's electronic systems, which may pick up on communication issues between the car’s computers.”

Alan Raynor, vehicles manager from VTNZ, which also does pre-purchase inspections, said professionals were much more likely to spot signs a car had been flooded than car buyers relying purely on visual inspections, and test-drives.

Flooding was widespread in the upper North Island, such as shown here in Te Aroha near Thames, but the most densely-populated area hit was Auckland.

Cars that had been dried out and cleaned completely might be hard to identify as having been flooded, he said.

But he said side door plastic trim could be removed to check inside the frame for water and signs of debris.

Rolling out seatbelts to their fullest extent could also reveal watermarks and dirt.

If a buyer spotted signs like these, or noticed unusual smells, they should get an inspection, and ask the inspector to check thoroughly for signs of flood-damage.

Professional motor dealers are required by law to disclose flood damage, and where they haven’t, buyers can take claims to the Motor Vehicles Disputes Tribunal, which has forced dealers to make refunds to buyers they duped.

Late last year, an Auckland car dealership was ordered to pay more than $7000 after not telling a customer the Jeep Grand Cheroke they were buying had been written off in an accident.

The car had been in a crash in Australia a year before the sale, where it had sustained heavy damage and been deemed an insurance write-off, according to a decision from the Motor Vehicle Disputes Tribunal.

The risk with flood-damaged cars is that safety systems run by computers stop functioning properly.

“The last thing you want is to buy a second-hand car, then two months later, the electronics or safety features shut down,” Everett said.