Buyer Beware: Flooded Vehicles on the Market

Recent flooding in North Texas and across the country continues to haunt used car buyers. One Dallas mother thought she was getting a great deal on a 2013 Jeep Patriot.

"We were looking for a used something. Just something that was good on gas," said Gabby Miller.

She wanted something that would comfortably seat her family of five. When she found the Jeep at Auto Class Direct in Plano, she was thrilled.

"It was very good, so we hit the jackpot!" she said, smiling.

The list price was just under $12,000 and it had a clean CarFax report.

"Then about four days later, the starter went out," Miller said.

That was the first red flag. She took it to a mechanic, who found that the undercarriage was caked in mud. But that's not what disturbed the mechanic. He also found rust - lots of it. He told Miller the rust was an indication the car had been sitting in water.

"You can't explain the rust underneath the seats and the rust underneath the door handles," said Miller. "And it's a two-year-old car!"

Two more mechanics agreed the Jeep appeared to be flood damaged.

"So at that point we went back up to the dealership, and then finally they relinquished and decided to give us our money back," said Miller.

She thought the ordeal was over, until days later she saw the vehicle back on the dealership's website.

Miller contacted the NBC 5 Investigates Consumer Unit. Consumer Investigator Deanna Dewberry, dressed in jeans and a T-shirt, visited the dealer and asked to see the Jeep. She took Mark Collins, an expert with the National Insurance Crime Bureau.

Dewberry told the salesman she wanted to see the Jeep on the website. He showed it to her saying the Jeep had just come in. He said it was being cleaned before sale.

When asked if it had been in an accident, he said no. But when asked whether there had been flood damage he said, "Not that it shows on there. And coming out of New Mexico and Texas, it shouldn't be."

But consumers must keep in mind that North Texas and Houston saw torrential spring flooding this year. And the Jeep came from an area near Albuquerque, New Mexico, that was plagued with flooding last summer.

When asked if consumers can spot a flood-damaged vehicle, the salesman said, "Sometimes, not always."

But Collins says in the case of Jeep Patriot in question, the evidence is clear.

"One of the first things I noticed on the actual vehicle computer that's mounted under the hood there's a lot of oxidation," he said.

Oxidation is an indication of water exposure, and that's certainly not good for your vehicle's computer. Collins also noticed sediment in crevices under the seats and in the trunk. Bolts in the trunk and under the seats were also badly rusted. Collins said there is no doubt in his mind that the truck is flood-damaged.

When Dewberry talked to the owner of the dealership, he admitted that a mechanic he chose also confirmed water damage. But he said he had no intention of re-selling the damaged vehicle. His salesman was new, he insisted, and was unaware of the Jeep's history.

So why was the Jeep back on the company website? Rome Colburn, the operation's manager, said it was an innocent oversight.

"When we unsold the vehicle," Colburn told us, "it automatically put the vehicle active again in our system."

As for Miller, she's still looking for an affordable vehicle for her family. But now, she'll be even more cautious.

"I would definitely do a lot more research, and I know what to look for another flood damaged car," Miller said.

This story is proof that just pulling a vehicle history report is not enough. In this case, the Jeep was repossessed in New Mexico and sold to three salvage dealers before it ended up on a used car lot in North Texas.

Before you buy a used car, order a vehicle history, take it for a test drive and have it inspected by a reputable mechanic. The Texas Department of Motor Vehicles has more advice on its website, and you can also file a complaint against a dealer.

As for the dealership, the owners insist they're also victims. They say they unknowingly bought a water-damaged vehicle. They say they'll sell it back to auction and report the suspected flood damage, losing money in the process.

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