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Be very careful in the coming months if you're buying a used car. Don't think because you live in Tulsa, Oklahoma you're immune.

What happens is the cars get totaled. The insurance company then sells the totaled cars to recoup some losses at auction as salvage. The salvaged cars are bought by agents who then transport them to states with lax titling laws. They retitle the cars with a new title, instead of salvage, and then do a half-hearted repair job. The car then gets shuffled again out of that state to other states, usually out of the storm area, and internationally.

After Katrina there was a story about a person down in South America who got a "good deal" on a Mini Cooper, had it sent down to find out that it was a flood damaged, ill repaired money pit. They ended up spending more than the car was worth to make it whole.

Also remember, these cars can end up even at reputable dealers. For example the same agent may just put them up for auction sale. A reputable dealer buys the car at auction, doesn't sell it CPO and puts it on the lot near as-is.

So be careful - a lot of salvage going to be hitting the market in 3 to 6 months, and there is a very tight market on used inventory.

http://editorial.autos.msn.com/blogs/autosblogpost.aspx?post...
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So be careful - a lot of salvage going to be hitting the market in 3 to 6 months, and there is a very tight market on used inventory.

And a lot of them will be coming out of the rental fleet.

Richard
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They should be just recycled, shredded, leave them as scrap... Imagine the electronics today, ABS systems alone might cost more than the vehicle's value, much less if it costs lives.. Shred 'em...
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I absolutely agree that this issue is going to impact the used car market. In addition to the cars “flushed” through the salvage process, numerous private party cars, without insurance (or salvage documentation) are going to wind up on the market. It wouldn’t surprise me if this issue lingers for more than a year.
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About 15MM new cars are produced in the US in a typical year. (The low in the recession was 9MM; record high is 18MM).

From an investors point of view, that 230k cars is abt 1.5% of US production. It is not significant to new car production.

However, it could produce a shortage of used cars and drive up prices--especially in that region.

The burden on the insurance industry could be the most important aspect.
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Prior flood damage can also be a problem with used parts that are taken out of scrapped cars.
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Prior flood damage can also be a problem with used parts that are taken out of scrapped cars.

I would think that depends on the part. At one extreme, I wouldn't be concerned about a tail light housing being flooded. At the other, I wouldn't want to touch a seat that was soaked.

You'd have to think about the part and how it would be affected by being submerged in salt water.

--Peter
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I would think that depends on the part. At one extreme, I wouldn't be concerned about a tail light housing being flooded. At the other, I wouldn't want to touch a seat that was soaked.

You'd have to think about the part and how it would be affected by being submerged in salt water.

--Peter


In this case I would disagree - most of this damage is salt water or brackish water. Car parts + salt + water = epic fail
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