Cars ruined by Katrina enter Bolivian auto market

COCHABAMBA, Bolivia -- The bathtub ring of mold on the ceiling of Colleen McGaw's Mini Cooper marks how high Hurricane Katrina's floodwaters rose inside the sporty red coupe.

"There was this mold, this grossness all over it," McGaw said, recalling how she found the car, her college graduation present, three months after the storm submerged her New Orleans neighborhood. "I cried. It may sound lame, but I cried. I had wanted a car like that since I was a child."

Two years later, McGaw was shocked to learn that her beloved Mini turned up 3,600 miles south in Bolivia. Its new owner -- stuck with a complete overhaul at $23,000 and counting -- is feeling her pain.

'Autos Katrina'

Tens of thousands of cars were damaged or destroyed by Katrina, which submerged much of New Orleans in a corrosive broth of saltwater and mud. U.S. officials warned Americans to beware of buying the drowned cars.

But many "Autos Katrina" were shipped overseas, often sold through Internet salvage auctions now globalizing the auto recycling industry.

Totaled cars used to be sold mostly at local auctions to scrap metal dealers and serious gearheads, who well understood the risks of the trade. But in the past five years, an explosion in online sales has lured shoppers around the world. It's a "Wild West marketplace" of tainted dream cars at rock-bottom prices, said U.S. auto insurance industry analyst Brian Sullivan.

"Information is in short supply, and you have to be smart and know what you're doing," he said.

Suspected Katrina cars -- with their jittery wiring, sand in the cracks and the telltale mildewed stink -- have cropped up in a number of countries, but Bolivia has become a particular target. One local environmental agency believes 10,000 or more flooded U.S. cars may have ended up in the landlocked nation, drawn by loose import rules, a thriving smugglers' economy and an insatiable hunger for cheap wheels.

The hurricane relics are part of a deluge of used imports rapidly transforming South America's poorest country. Fueled by money sent home by migrants abroad, the number of vehicles on Bolivia's few paved highways is expected to double in the next five years.

A Mini's journey

McGaw's Mini is still a long way from joining the traffic jam.

Hauled south on a container ship, imported through the Chilean port of Iquique and trucked over the mountains to this Andean valley city, the coupe is now perched on a hydraulic lift, stripped to its chassis and surrounded by its rusty innards.

The new owner -- worried that publicity will reduce the car's resale value and perhaps smarting from automotive heartbreak -- declined, through his mechanic Ramiro Sanchez, to be identified or interviewed.

"He's totally demoralized, but he doesn't just want to give up on it, either," Sanchez said.

The Bolivian buyer paid $7,000 for the Mini, but it took another $5,000 in shipping costs and import duties before he could kick the tires. He immediately towed the car to his friend's shop. About 50 other Katrina car owners have come to Sanchez for help since then, he said, but he's turned nearly all of their vehicles away as beyond repair.

The Mini's history was easy to spot, Sanchez said: mud caked to the engine block, pedals rusted in place, and a New Orleans safety inspection sticker on the windshield.

Undeterred, the owner shelled out an additional $7,000 -- plus $4,000 in tax and shipping this time -- on the parts from a second Mini, this one condemned after a front-end collision. Parts from a third are now on their way to complete the job, Sanchez said.

How much will all the labor cost? He's a friend, Sanchez said with a shrug. He'll cut him a deal.

And despite the new owner's pain, getting a brand-new Mini shipped to Bolivia would probably hurt even more -- about $35,000 with taxes and shipping costs included, Sanchez estimates.