Flood-damaged cars: What you need to know

6:03 pm on 1 March 2023
Kimberley Road, Epsom. Lots of cars have been caught in floodwaters and are waiting to be towed. 28 January, 2023

Thousands of cars suffered varying degrees of water damage during Cyclone Gabrielle. Some damage is immediately obvious, other damage may take time to become apparently. Photo: RNZ/ Pip Keane

With thousands of vehicles water damaged from the Auckland January floods and Cyclone Gabrielle combined, insurance companies are swamped with claims from those who has been severely affected by the weather.

Drivers face many pitfalls and dilemmas. Here's what you need to know.

Buyers beware

The Insurance Council of New Zealand (ICNZ) says just in February, 524 cars were written-off due to water damage in New Zealand, but thousands more are expected to have the same fate in the next months.

On top of it, thousands of non-insured water-damaged vehicles are expected to go back to the market, and ICNZ said buyers need to be aware.

Motoring expert Clive Matthew-Wilson has been actively campaigning on road safety and consumer issues for 25 years.

He said water could substantially damage a vehicle.

"If you drive through flood water, there is a high chance of your car sucking water into the engine. That will wreck the engine instantly."

But it was damage to electronics that had wrecked most cars. The car may fail immediately, or it may fail at some random time in the future, he said.

Matthew-Wilson said electric cars were generally okay in the wet but were at risk from major battery fires.

"Once floodwater, especially sea water, gets into an electric or hybrid car battery system, there's a high chance of a serious fire. So, you're probably not going to be electrocuted, but the car may catch fire.

"Even if the battery doesn't fail immediately, the salt may cause internal corrosion that may trigger a sudden battery fire, days, weeks or months later."

Matthew-Wilson said there was no way of knowing what long-term damages water could cause to a car, so the insurance companies almost invariably wrote these vehicles off.

Car written-off due to flood damage?

"Every written-off vehicle should be de-registered, which means it will come off the national fleet, tracked by Waka Kotahi," Motor Trade Association sector manager Tony Everett said.

Everett said after then, the cars are no longer allowed to be on the road.

"That means the car is taken out of the market completely, the registration is cancelled, the number plates are removed from the car and handed back to Waka Kotahi."

The car then is normally taken to a salvage auction, where companies or car enthusiasts might buy the vehicle for parts or long-term repair projects.

Used car dealer Turners NZ is one of the companies dealing with flood-damaged cars.

Chief executive Todd Hunter said most written-off vehicles were sold for parts.

"It's really hard to repair a vehicle that have been flood-damaged, so the auctions are mainly between parts businesses, dismantlers, vehicles recyclers and wreckers."

What happens when a flood-damaged car is not insured?

Matthew-Wilson said that was when it became complicated.

He said in addition to insurance write-offs, there were an "unknown but significant" number of private cars that have been flood-damaged, but may not show up in any official records.

"There is a number of privately owned vehicles that may or may not be registered, may or may not have a warrant, may or may not have insurance. So, you simply don't know if they have been water damaged."

The back of the black car with the emission of smoke from the exhaust pipe on the background of nature. The concept of environmental pollution by vehicles.

Water that gets into the exhaust may destroy a car's engine immediately, or the damage may materialise later. Photo: 123RF

The Insurance Council of New Zealand said while insurers acted responsibly to get water damaged vehicles written-off, off the road and deregistered in the first instance, there was no robust system in place to ensure the safety of flood-affected uninsured vehicles.

Matthew-Wilson said it was almost impossible to put a system in place to ensure non-insured vehicles that might have been flood-affected were being safely sold online.

The price it cost to regularise a car could weigh heavily on the already stretched pockets of many New Zealanders, he said.

"There are thousands of people out there driving vehicles without a warrant of fitness (WOF).

"With the cost-of-living sky-high, if you are poor enough you and have to make a choice between getting your WOF or paying a mortgage, of course you will pay your mortgage so your family can survive."

Matthew-Wilson said without a WOF on a vehicle for a while, drivers could not update their registration, and after a year this vehicle disappeared of the Waka Kotahi system.

"But it's often still driven and can be easily sold online, in places like Facebook Market Place, for example."

You could be sure that many owners of uninsured vehicles probably were not going to reveal that their car had been through deep water, he said.

Through a statement, Waka Kotahi said it had recently published a webpage providing advice on water damaged vehicles.

The page also contained a link to a damaged vehicles list.

"While not conclusive, this list provides information on vehicles written off by insurers (the insurer notifies us) and information on vehicles provided by the public," it said.

Matthew-Wilson said the government needed to get tougher with damaged-vehicles registrations.

"If a previously written-off vehicle is later re-registered and offered for sale, it should be compulsory for any potential buyer to be informed of that vehicle's history. It shouldn't be the buyers' job to find this information out."

He advised buyers use an online data service such as Carjam, which would give all available information about a vehicle's history.

How do I know that I'm not buying a second-hand flood-damaged vehicle?

Matthew-Wilson said a full, independent inspection of any used car was a must.

"You should never buy a second-hand vehicle without having a trusted mechanic looking into it, this is your only real protection."

When going to look at a used vehicle advertised on social media, paying attention to a few details could make a difference, he said.

"Give the car a good sniff. If it smells like old blankets combined with your brother socks, that's the give-away that the vehicle might have been water damaged."

Matthew-Wilson said buyers should also always put the windows of a vehicle up to check for moisture.

If you were checking a vehicle and it had it windows down, you should ask the owner to put them up, he said.

"A really good sign of a vehicle that has had water on it, it's as soon as you close the windows and doors, then you are going to get mist all over the inside of the windows."

"It lingers for a long time, because it's quite hard to get a vehicle completely dry."