Flooded Cars For Sale?

Find Out How To Avoid Being Scammed

(CBS)  These days, they are a familiar site on TV: Waterlogged cars floating down the street. Hundreds of thousands of vehicles were flooded by Hurricanes Katrina and Rita. But CBS News correspondent Susan McGinnis reports for The Early Show's ConsumerWatch about what happens to them after the waters recede.

You'd think those flooded cars would be a total loss and sold for scrap. But experts say they present a golden opportunity for con artists who buy them cheap, clean them up, and then sell them to unsuspecting buyers.

"I bought a car that should have been sitting in a junkyard!" Diane Zelinski says. "It should never have been on a lot of a car dealer."

All Zelinski wanted was a safe car for her son Nate. The used Pontiac Grand Am seemed perfect. "It looked good. It ran good when we did the test drive," she says. But three weeks after Nate got the car, there was major trouble.

"I went to make a left hand turn and all of a sudden I heard bang. An extremely loud bang," Nate Zelinski says. "There was oil and pieces of engine block all over the place. It was actually chunks of the engine all over the place."

It turns out that his Grand Am had a soggy past. When Nate Zelinski checked out the car's history online, he found it had been in a flood a year earlier.

"I almost fell of the chair," he says. "I was like, 'Wow, my car was underwater at one point. It's not supposed to be that way.' "

In the last month, more than half a million cars were flooded by Katrina alone — cars that soon may be flooding the used car market after being dried out and cleaned up by scam artists.

"They'll spray new-car smell in it," Larry Gamache of Carfax says. "They'll replace the leather. They'll do things to make you think that it's a really cherry car, but it's a waterlogged wreck festering with bacteria."

Carfax is an online service that tracks the histories of used cars.

"One of the most problematic things about flood-damaged cars is that the airbags and anti-lock braking systems will fail eventually," Gamache says.

But when you first do that test-drive, he says the car will look great to the driver. He says that cars flooded by Katrina are especially hazardous.