Transportation is an essential part of daily life, and obtaining reliable transportation may be essential to recover from the effects of recent disasters. You may need to purchase a new or used vehicle. The National Association of Securities Dealers estimated the number of vehicles that were flood damaged from Katrina to be more than 570,000… just from Katrina.

It is important that consumers be aware of this fact to avoid being trapped into purchasing a vehicle that may have been flood-damaged as a result of a disaster.

New or Used?

When considering a vehicle purchase, first decide whether to purchase a new or used vehicle. It is important to compare not only the sticker price but also the other costs such as gas mileage, insurance premiums and likely cost of maintenance and repair. Search publications and the Internet for thorough comparisons. Consumer Reports and Kelly Blue Book are two sources with a wealth of information.

Price

Consider how you are planning to pay for the vehicle and make sure you can afford it before purchasing. Often, prices on new and used cars can be negotiated. Knowing the wholesale price to the dealer, which can be obtained in Consumer Reports, can be beneficial when negotiating the price of new vehicles. Check the Bluebook price to learn what used cars are worth. Knowing these facts beforehand can prove to be a beneficial negotiating tool and also makes the consumer more knowledgeable about the situation. Keep in mind that used cars often do not offer the same warranties as new cars, and there is a certain degree of risk associated with buying a used car. If you choose a used car, it is important that you have a trusted mechanic examine the car prior to purchasing it.

Financing

Financing the vehicle, whether new or used, is a critical factor in the buying process. It is best to shop for a loan before buying the car. This will allow you to decide how much can be borrowed, the monthly payments that will be required and the duration of the loan. Keep in mind that a greater down payment will lower the amount to be financed, thus creating lower monthly payments.

Use the Internet or the Yellow Pages to shop for the least-expensive loan. Call your bank or credit union for a rate quote before talking to the dealer about financing. If you choose to finance with the dealer, make sure the rate that is offered is equal or better than the one quoted by your bank or credit union. It is important that you get the lowest possible rate on the loan to avoid paying high interest payments throughout the life of the loan.

Flood-Damaged Vehicles

Following hurricanes or flooding, consumers must be aware that an increased number of cars that have been adversely affected. Unscrupulous dealers may try to take advantage of consumers by “cleaning up” the affected cars and putting them on the market. Cars that have been flooded will often cause serious trouble for the owners. Be aware that water damage to vehicles often damages the electrical components. These problems may not show up right away because it may take weeks or even months for corrosion to eat away at the parts, ultimately causing failure. If you are considering purchasing a vehicle that could have possibly been affected, it is recommended that you check the vehicle’s Carfax report. The Carfax reports include an alert that notifies consumers of any car that was last registered in an area declared a flood-emergency zone by FEMA. Check the date and transfer to see if the vehicle came from a flood-damaged area and if the title is stamped SALVAGE. Carfax reports are available online at or from Experian at for $19.99.

Here are some tips on how to spot a flood-damaged vehicle:

• Check under carpets for wet or muddy areas.
• Inspect the lights to see if a water line is visible.
• Look at the heads of any unpainted, exposed screws which will show signs of rust relatively quickly.
• Check the vehicle’s title history.
• Complete a detailed inspection of the electrical wiring system looking for rust or water residue.
• Inspect the car in difficult-to-clean places, such as the gaps between panels in the trunk and under the hood.

These are just a few of the many things to look for when flood damage may be suspected. Keep in mind that the more educated you are about the situation, the better consumer you will be, allowing you to be able to get the best quality vehicle for your money.

Developed by:

Jeanette Tucker, Ph.D., Professor
and
Kaci Metzger
LSU School of Human Ecology