Car buyers have been warned to be on the lookout for flood- damaged vehicles from Queensland and Victoria. Thousands of them have been salvaged from the disaster-affected areas for resale.

The Insurance Council of Australia has received more than 10,000 claims for damaged vehicles and has costed them at $296 million.

While most vehicles have been deemed statutory write-offs and cannot be repaired legally, that has not stopped them going under the hammer at auctions.

Pickles Auctions has already held two sales of flood-damaged cars in Brisbane and another is planned for Melbourne next week. Angela Conn, a spokeswoman for Pickles, said most vehicles sold at the Brisbane auctions were statutory write-offs and the buyers were informed.

But extensively damaged cars from the flood and cyclone areas are still expected to slip through loopholes in the system. Cars deemed repairable write-offs by insurers can be repaired and sold legally, even if they have been damaged or flooded.

Though the cars are being sold in Queensland and Victoria, experts say they will quickly be moved to other states on the used market. Buyers are being warned to pay close attention for signs of flood damage in used cars.