How to Spot Trade-In Vehicles with Flood Damage

Flooding can completely destroy a vehicle’s electric and mechanical systems, affecting lubricants, and leading to rust and mold. And it’s not a small problem, in 2024 there were 347,000 flood damaged vehicles resulting from hurricanes and other storms. But not all flooded cars are totaled, and some may sneak back into the market, getting shipped across the country by resellers and wind up at your dealership from a customer looking to make a trade-in. This article will review everything dealers need to look out for to avoid accepting flood-damaged vehicles in the trade-in process. 

Avoiding a flood-damaged trade-ins

Obviously you will do your due diligence by checking the VIN number in CARFAX and Autocheck, The National Insurance Crime Bureau (NICB), and National Motor Vehicle Title Information System. But, it can be trickier than that because the title could have been washed in a process called “title washing,” which is when cars that have been totaled (or stolen) get clean new titles in states with more relaxed regulations. These concerns are also relevant for dealerships that aren’t in flood and hurricane zones – in other words, for dealers in states that damaged cars will be relocated to.¹ So you will likely need to inspect the car more thoroughly to ensure no flood damage has occurred.  

How can you spot flood damage when assessing vehicles? 

Inspect each area of the car carefully, following this checklist as a guide: 

• Inspect the trunk for signs of moisture or debris, including the carpet
• Check all carpeting and textiles (including seats and seatbelts) for any moisture, stains, or damp smell
• Inspect metal components inside the car, like the center console for any rust
• Test all electrics like windshield wipers
• Look closely at the engine bay
• Check for waterlogged headlights or a waterline 
• Look for debris under the hood
• Check under the vehicle for any debris, rusting, or flaky metal 
• Check for a water line under any spare tire or in any small crevice, run your hands along every surface to check for pooling water and moisture
• Check all scents closely to sense mold¹ 
• Check for car freshener and shampoo scents being used to cover up mold. Sit in the car with the windows closed to get a more accurate read.
• Check for corrosion where the doors meet the body of the vehicle, as this is a common spot where it will show up.
• Check the oil to see if the color looks off or if it feels too sticky
• As always, take a test drive – this will give you the most accurate insight into how the car is running, as well as how the environment of the interior feels.
• As you drive, check for smoke or strange noises that could indicate major damage.² 

How AI can take your trade-in assessments to the next level 

As a dealer, you want to feel confident that you are bringing high quality vehicles onto your lot – and pricing them accurately. With AI tools, you can level-up your appraisal process by using photos to detect even unnoticeable vehicle damage. Once images of the customer’s car are uploaded, AI compares it with existing knowledge of that vehicle’s attributes to detect differences – and help you calculate an appropriate price. 

Get started with ClearCar

Our ClearCar AI damage detection is a game changer for vehicle trade-ins. How does it work? First customers start off with the ClearCar Capture feature. They’ll receive a link and be asked to submit photos through their phone in a self-guided process. The photos show ClearCar the true condition of the vehicle. The AI tool within ClearCar then scans the images, comparing it to standard undamaged models, and points out any scratches, dents, rust, or other damage. ClearCar provides a report of the issues indicating the severity and can integrate this with real-time market data to help dealers accurately value the trade-in. Damage detection is a crucial step in evaluating trade-ins, and our tool makes the process pain-free, accurate, and efficient. Try ClearCar today.

Sources

1. Valdes, Renee. “Flood-damaged cars: How to spot and avoid them.” Kelly Blue Blook. Retrieved May 15, 2025. https://www.kbb.com/car-advice/avoid-flood-damaged-cars/ 
2. Threewitt, Cherise. “10 ways to spot a flood-damaged car.” How stuff works. Retrieved May 15, 2025. https://auto.howstuffworks.com/under-the-hood/salvage-used-junkyard-parts/10-ways-to-spot-flood-damaged-car.htm 
3. Lin-Fisher, Betty. November 8, 2024. “Beware of flood-damaged vehicles being sold across US. How to protect yourself.” USA Today. Retrieved May 16, 2025. https://www.usatoday.com/story/money/2024/11/08/beware-flood-damaged-cars-sold/75940046007/