A devastating flood hit Chennai late last year, and over 40,000 vehicles went off the roads because of the incident – now used car dealers are making a kill buying the cars from auction lots for cheap, according to a BBC report.
Many lucky buyers report buying the latest Porsche from the damaged car auctions for a cheap $7,000, while others bought new model luxury cars such as Jaguar, Range Rover, BMW, Mercedes, and Audi among others for a third or fourth the market price.
"My wife said if you go the auction, you must return with a Merc. So I am looking for a bargain. If he was alive, my father would have been proud of me," said 29-year-old Jambu Kumar, an automobile spare parts dealer who would be the first person to own a car in his family if he is lucky enough to get what he wants.
Some of the recovered or flood-damaged vehicles are still caked in dry mud – having been be swallowed in sewage and rainwater, their interiors now mildewed and frayed. Insurers say many of the cars would be way too expensive to repair at company-owned workshops, and faced with thousands of insurance claims, need auctioneers to take the cars off their hands in order to help with settlements.
An analyst said there are already over 50,000 insurance claims totally about $740 million (£480 million), and insurance companies are begging used car dealers and auctioneers to take them off their hands. Abhishek Gautam of cardekho, an automobile portal, has already obtained about thousands of cars on behalf of 18 insurance firms and expects to sell off over 2,000 of them – having sold auctioned off over 700 within the past few days.
Apart from mud and dirt, the cars do not bear any signs of physical damage and the auctioneers claim only the car’s electrical and electronic systems may be affected with about $1,000 required to fix them; but automobile expert Hormazd Sorabjee thinks otherwise, saying "Water is a car's worst enemy. You have to change a lot of things. Just fixing the electronics and electrical systems may not be enough.
"Water damage can reduce the life of mechanical components of cars, like drive shafts, bearing and suspension components, not to mention the havoc it wreaks on electrical systems," he added.
Some dealers come with expert mechanics and electricians before placing their money on any desired cars, and these consider buying flood-damaged cars something of a worthy gamble. One of them, Kumar, has already bought over 50 of such cars and has lined them up for repairs – with 20 of them already resold.