The ever-helpful folks at HowStuffWorks produced a ten-point checklist for spotting flood damaged cars:
When subjected to deep flood levels, soaked cars are often classified as totaled and are demolished. Some flooded automobiles, though, end up on used car lots.
Buyers beware: Not all dealers are up front when a car has flood damage, and it can cost you. Even if a car looks good and seems to run fine, expensive problems can appear later as corrosion continues to creep inside critical components.
This is absolutely critical information for anyone in the used car market. Among other things, a flood-damaged electrical system is a fire hazard, putting you in a seriously life-threatening situation whenever you're behind the wheel of a compromised vehicle.