Beware of Flooded Cars

Hurricane Katrina destroyed more than 600,000 vehicles, and history shows about half of them will be sold to unsuspecting consumers.

ABC News sank a car in Baltimore Harbor to determine the telltale signs of a car that had been submerged.

Allstate Insurance donated a 2000 Dodge Neon that appeared to be in good shape. The fluids were drained from the car so as not to pollute the harbor. It was underwater for an hour.

All the damage was covered up by two professional detailers who steamed the engine and re-blackened the rubber seals to hide salt marks. Their biggest challenge was the stench, and they spent five hours making sure the car smelled perfect.

Detailer Teddy Baker attributed his expertise to having worked for an overly aggressive used-car dealer.

"They would ask me to do things that were just a little shaky and not what I call being fair," Baker said. "So therefore I got away from that altogether because I felt, that's just not me."

After their treatment, the Neon looked good as new. Dozens of "Katrina" cars like this have already shown up as far away as California, Texas and Florida.

"Any one of these cars could be flood-damaged," said Larry Gamache, who works for CARFAX vehicle database.

Experts with CARFAX point out 28 states do not require a specific flood disclosure brand on their titles, so it's easy for crooks to clean up a car and its paperwork.

"Flood-damaged cars are the one type of car that CARFAX will not recommend you buy," Gamache said. "Buy a car that was previously a salvage car. Buy a car that was previously in an accident. Buy a car with a rolled-back odometer. Never buy a flood-damaged vehicle. There is no way to predict how that car is going to perform in an accident."

Signs of a Flooded Car

Bolts under the seats: Allstate expert Mike Porter said that you should check the bolts beneath the seats for rust.

"Even with the cleaning, you still see the rust areas and the orange color that's coming from the salt water," he sad.

Fuse box: Another telling area is the fuse box. Porter pointed out rust on the inside and corrosion on the fuses.

"Your car could stop while you're going down the road 60 miles an hour because these things start to shut down," he said.

Taillights: Sometimes, water stays behind and sloshes around in the tail lights.

"And even if it's gone, you may see the salt line," Porter said.

Spare tire: Porter said that after a car was submerged, that salt or mildew could form around the spare tire in the trunk.

"The salt water's eating the wiring away," Porter said. "Your lights start going on you. You don't have brake lights. When your brake lights don't work, you stop, the car behind you doesn't. … [That] becomes an issue."

The damage to the Neon occurred after an hour underwater. Weeks festering in Katrina water would undoubtedly be worse.

Cars like this are not likely to show up at legitimate car dealers who probably won't risk their reputations on known flood cars. But illegal, unlicensed dealers called "curbstoners" often list cars for sale in the paper, and then meet you somewhere to make the sale. When you have problems, you can never find them again.

Before you buy a car, it's important to check the car's history through a service like CARFAX, which offers flood checks for free as a public service. Also have the car checked out by a mechanic "before" you buy it.