CarMax, Inc. provides these tips on how to avoid the purchase of used flood-damaged cars:
1) Check for a moldy smell inside the car and feel the carpet for dampness
2) Be suspicious of an older car with a brand new interior or carpeting
3) Check for rust under the brake or gas pedals
4) Look for dirt or rust under the dashboard and floor mats
5) Inspect the bolts and screws under the seats for evidence of rust
6) Check the undercarriage for excessive rust
7) Check inside the trunk under the carpet and in the spare tire well area for rust, dirt or sand
8) Look for corrosion, water marks, or a thin brown line on the exterior of the vehicle
9) Check to see if the electrical system works
10) Check the VIN number with AutoCheck or Carfax to see whether a flood claim has been filed or a salvage title has been issued on the vehicle
[Source: via TheAutoChannel]