State Insurance Commissioner John Garamendi says there are reports vehicles that were submerged in flood waters last year are now surfacing in California.
A dealer in San Joaquin County says unscrupulous operators can make hefty profits on salvaged vehicles.
He says even cars that were totally submerged can be cleaned to the point where the average buyer couldn't detect any damage.
Frank Scafidi of the National Insurance Crime Bureau says even though California is far from where the flooding occurred, the state is a favorite for those looking to unload the vehicles.
"California has the most people. We love our cars out here. It's a great market for re-sale. So it's a natural."
As many as 600-thousand cars and trucks were damaged by flood waters following hurricanes Katrina and Rita.
The experts say reconditioned cars seem ok on a test drive, but eventually major problems are likely to develop.