CARFAX warns of 45,000 flood-damaged cars entering the used market

Between April and July, storms flooded tens of thousands of vehicles across Texas, Kentucky, West Virginia, and nearby states, according to CarFax.

Now, many of those units are finding their way back into the used car market, just not in the areas that were hit.

By the numbers: CARFAX estimates that up to 45,000 vehicles were flood-damaged during those mid-year storms. That’s on top of the 482,000 water-damaged cars already on the road as of early 2025.

Why it matters: These cars rarely stay local. They reappear at auction, through wholesalers, or as trades, often landing in states where flooding isn’t even part of the retail conversation.

For consumers, the red flags to watch for span damp or mismatched carpets, rust around pedals or latches, mildew smells, brittle wiring, and moisture trapped in lights or instrument panels, according to the release.

But this isn’t just a consumer issue. 

Because with used demand holding up, and more new-car buyers shifting into pre-owned, dealers are moving quickly to find extra used inventory where they can. 

The problem is, speed without strong inspection processes opens the door for flood cars to slip through.

According to the Florida Automobile Dealers Association (FADA), about half of all hurricane-damaged vehicles eventually make their way back into the market. 

On top of that, as the FADA explained, not every state brands titles for flood damage. Title-washing still happens. And often, the early indicators (odor, corrosion, faint water lines) can be missed. And once that car is sold, any breakdowns, warranty claims, or buyback pressure often fall back on the dealership.

That’s why the group recommends tightening three specific areas:

First, treat every unit like it could be a flood car until proven otherwise. 

Second, lock in a clear intake process for both trade-ins and auction buys. Most auctions give buyers a brief arbitration window to flag undisclosed damage. Once that window closes, the vehicle usually can’t be returned.

Third, require customers to sign disclosures during trade-in, confirming the vehicle hasn’t sustained flood or major damage. If they lie, there’s backup. But if the form’s missing, there’s not much to fall back on.

Bottom line: The next flood-damaged car won’t be obvious. It’ll look clean, drive fine, and slip through until the electrical issues start. Dealers that catch it early and tighten the process can keep moving quickly without second-guessing the quality.