First thing, the cars could either be damaged or wrecked and not both. So A, C and E or out.
On to tense now.
Damage or wreckage happened before selling. So
damaged or wrecked requires past perfect while selling requires simple past.
B is the other way around and hence out
On to logic.
D is the only choice left out. But what is important in this passage is the fact that the damaged cars have been sold or will have been sold or will be sold without adhering to rules. This should be the primary focus of the sentence by making it as the main clause while damage or wreckage should play second fiddle. Doesn’t it suffer logical predication? How can we say for sure that many of the cars will have been sold? Going simply by grammar, may be, the cars that were damaged or wrecked ( not damaged and wrecked) will be sold makes some sense. But where is such a choice?
It looks as though the passage tries to emulate some similar one, missing the salient features though.
The official answer is sadly wrong on grammar. Any comments?