My Dad owns a 2008 Scion xD. He noticed his car started to smell like mold. He looked around and found that there was a large puddle of water in the hatch - spare tire area. The water had also splashed into the rear seats area. He drained it and cleaned everything. His tail light had a hole in it, so he bought a new one and sprayed the car down to see if it was just the tail light that leaked. It was also leaking right above the tail light but dripping into the hatch not into the tail light. There is a 3" rubber square right above the tail light. Is this a weather strip? Could the 3” rubber square be where the water is leaking through? If so how do we fix it?
The weather stripping or rear hatch seal is the rubber seal that goes around the entire rear hatch opening. Two things that need to be checked for are one that there is no damage or wear to the seal itself and also that the rear hatch itself is adjusted to a tight fit to the seal. Using a water hose and spraying around the rear hatch gap while having someone inside the vehicle should reveal the source of the leak.
The hatch should be inspected for damage in suspected leak areas. Slight adjustments to the rear hatch can be made but often movement of the rear hatch can cause other resulting issues, such as creating other leaks, misalignment, and damage to the latching mechanism to occur if the hatch is not adjusted by body professional. You may want to enlist the help of a mechanic or body professional to conduct the water leak test and make or recommend the proper repair to correct the leak.