Hurricanes, Seawater and Cars - a bad combination

If you’ve been watching the news these past few days you’ve probably seen plenty of images of waterlogged cars.  New York City alone has thousands of flooded vehicles.  Some were immersed to the tops of the tires, while others were totally underwater.  What will happen to them?  All are junk; useful for scrap metal and body panels only.  But that’s not where many will end up . . .

Most of the cars will be covered by insurance, and they will be written off and sold as salvage.  For months to come, salvage auctions all over the East Coast will be processing these cars.  Some will look perfect, but they aren’t.  There’s a reason they were declared scrap.  If only they ended up that way.  The fact that they don’t is one of the dirty little secrets of the insurance business.

When an insurance company declares a vehicle a total loss, they are in essence buying the car from the owner at its pre-loss value.  But insurance companies are not in the business of fixing cars; they are in the business of money.  Therefore their goal is to turn that piece of totaled iron into cash in the most efficient way possible.

That’s where salvage auctions come in. Insurance companies hire these auctions to gather the wrecked, burnt, and flooded cars from individuals wherever they may be.  They then clean them up – if such a thing is possible – and auction them to the highest bidder.

Bidders at these salvage sales are supposed to be recyclers – junkyards, to use the more traditional term.  However, many buyers of flood cars are shady used car operations.  These people don’t buy the salvage for parts. They buy them to fix it up and sell – often to some unsuspecting used car buyer.

Insurance companies could stop this practice in a moment, if they wanted.  They could require flood cars to be cut up for scrap, and they could ban sales to so-called “rebuilders.”  Why don’t they do that?  Money.  A buyer of scrap might pay $10,000 for a flooded Porsche, because that’s the value of the salable parts.  But another bidder might pay $15,000 knowing he can sell the car to some unsuspecting motorist while it still drives.

From my perspective, it looks like that want the top bid – which probably comes from a “rebuilder” – more than they want these ruined cars off the road.

Why are they ruined, you ask?  How can a car be ruined while it still looks brand new, especially if it drives like new, too?  Here’s how it happens . . .

The first thing to fail is the electrical system. Most modern cars have wire harnesses running under the carpet – on the floor – and many have control modules down there too.  If seawater rises above the door sills these areas will be submerged.  When that happens, salt water invades the wiring, control units and electrical connectors and begins the invisible process of corrosion that ends up like the rusty junk you see, washed up on beaches.

Once it starts, there’s no turning back this process.  The only cure would be to strip out all the wiring and controllers and install new parts – a task that might cost $10,000 on an ordinary Toyota or Chevrolet, and that’s just the beginning . . .

When seats and upholstery are submerged their cushions and innards become waterlogged.  They can’t dry because the water is sealed inside by impermeable vinyl and leather coverings.  So the water stays in their, growing mold and rotting the interior from within.  It’s not a very pretty picture, when you cut it apart six months later.  Once again, it could be fixed, but the cost to take apart every bit of interior and wring it dry would be prohibitive and destructive, because most of thise pieces were never meant to be disassembled.

Then we come to the running gear.  Modern cars were not designed to operate in water.  Seals and gaskets keep oil and grease from escaping outward often can’t prevent seawater from making its way inward.  When salt water gets inside it ruins the oil, and begins the familiar process of corrosion whenever it comes in contact with bare steel. 

Seawater damage to wheel bearings and axles may be insidious – the bearings may fail one by one, over a period of years.  But fail they will.  The ocean will always win.  The Army learned this when they started driving truck up beaches – today, they strip and overhaul any axle assembly that’s been in salt water for this very reason.  You can do that in an ordinary car, too, but the cost will be high and it’s one more reason cars get scrapped.

The same thing happens in a engine.  If the engine is running when submerged it usually dies a violent death as incompressible water is sucked into the cylinders, shattering or bending the pistons and rods.  If the engine is off, the damage may not be as apparent, but the corrosion will begin inside, and the engine will fail long before its time.  This will happen even if the oil is changed.

Insurance companies know these things.  That’s why they declare flood cars to be total losses.  But to some dealers, they look too good to scrap, and there’s money to be made. 

These people will buy flood cars, change fluids, change failed control units, and get the vehicles running as best they can.  Then they offer them for sale, usually far below book value.  The cars often have salvage titles, which tell buyers the cars are reconstructed, but buyers look at the cars and tell themselves all is well, because they look so good.  Wrong!  A saltwater flood car will never stop presenting problems; it was written off originally for a very good reason.

A true repair of a saltwater flood car would consist of new wiring and control units, dried out or new upholstery, and completely overhauled or new drivetrain and running gear.   The cost of that work will far exceed the value of any ordinary car.

The take-away from all this:  Be very careful if you’re in the market for a used car in the next six months.  Steer clear of anything with a salvage title, no matter how god it looks.  If a car has a clear title, look at where it’s from. If it lived in an area impacted by Sandy – be very careful.