Why It Will Be Hard to Replace Cars Destroyed by Hurricane Ian

Shannon Bradley

Final numbers won’t be available for months, but one thing is certain: an overwhelming number of drivers en route from Hurricane Ian will replace a vehicle at a time when inventories are already low.

“We anticipate more than 300,000 vehicles destroyed by Hurricane Ian,” said Mark Friedlander, director of corporate communications at Florida’s Insurance Information Institute, citing early damage reports from Florida, North Carolina and South Carolina.

Ian fell ashore to submerge, smash and carry away countless vehicles. As hurricane victims resume other parts of their lives, they try to find rental cars, make auto insurance claims (if they had comprehensive insurance), and begin searching for replacement vehicles.

According to Friedlander, based on estimates, Ian could be the second largest vehicle damage event in the US, which would place it only behind Hurricane Harvey in 2017 when 500,000 vehicles were destroyed.

People also read…

How will Ian’s destruction affect the national car market?

The national auto market has been in chaos for more than a year. The supply of new and used vehicles was limited due to pandemic-related supply chain problems and semiconductor chip shortages. With automakers unable to meet demand for new vehicles, car buyers have depleted their used car inventories. This shortage has pushed car prices and car payments to record highs.

Vehicle stocks appeared to be stabilizing in September. Cox Automotive, an automotive marketplace and data company, reported that used car supply was returning to normal and used car prices were beginning to fall. New car inventories, while still below pre-pandemic levels, had improved, ending August at the highest level since June 2021.

Also Read :  Melting Down Crypto Coins: The Dangers of Account Takeovers in Decentralized Finance (DeFi) - Bitcoin (BTC/USD), APE Coin (APE/USD)

Auto dealers in Florida are working to meet the increased demand, and some automakers are committing to shipping more new vehicles than normal to affected areas. Many dealerships are also touting rebates of $1,000 or more for those replacing storm-damaged vehicles, as well as deferred payments for the first car.

In a press release on Oct. 11, Cox Automotive predicted that new vehicle inventories will remain tight, so about 80% of Ian’s replacement vehicles will be used. The good news from a market perspective is that most of this activity is expected to take place within a few months and “will not appreciably impact national used car retail sales.”

Search for the elusive replacement vehicle

Photos of hurricane victims with their recently purchased cars are beginning to appear on social media, and most also mention the difficulty of finding a vehicle and paying a high price. As more and more people settle insurance claims, demand is likely to continue to rise.

Matt Degen, senior editor at Kelley Blue Book, says buying a car outside of storm-damaged areas is an option because most dealer inventory is available online. “You can buy a car out of state and have it shipped. Usually the dealership works with buyers on registration and makes sure everything is compliant with their state, so that’s usually not a problem.”

Also Read :  Philips provides update on its financial performance in Q3 2022

Online car dealers are also preparing to meet the potential increased demand for vehicles in Ian-affected areas. Nicole Rappaport, spokeswoman for CarMax – the largest used car dealership in the US – said in an email: “Our network includes more than 40,000 vehicles of almost every make and model that customers in these affected regions can access and have delivered or relocated to the nearest location.”

Online car buying apps are another way to stretch the net when looking for a replacement vehicle.

For those who want a new vehicle and don’t mind waiting, ordering a built-to-order vehicle from the factory could be a solution. It can also be a way to avoid dealer markups.

Precautions when replacing a car after a natural disaster

If you’re a car owner replacing a vehicle after a hurricane or other disaster, there are several steps you should take to protect yourself.

You are not covered for storm damage unless you have comprehensive car insurance which will compensate you for the value of your vehicle at the time of loss minus an excess.

With car values ​​skyrocketing over the past year, you might be surprised at the value of your car. You can research the true market value of the car using price guides like Kelley Blue Book or Edmunds and challenge an insurance company’s quote if it seems low. When buying a car, it’s also important to look up the true market value so you know you’re not paying too much.

Also Read :  EY expands Neurodiversity Centres of Excellence in Canada

Finally, beware of flooded vehicles that have made their way back to the market. Degen says unscrupulous vendors trying to unload formerly flooded vehicles are always a problem after disasters like Ian’s. While these cars should have flood or salvage titles, that’s not always the case.

Degen recommends getting an AutoCheck or Carfax vehicle history report, which usually shows all flood titles issued. Again, be sure to consult price guides to verify the fair purchase price of the car. When a seller charges much less, that should raise suspicion.

Another safety measure is a pre-sale inspection by your mechanic of choice. Degen says, “It might cost you a few hundred dollars, but it could save you a lot in the long run.”


Leave a Reply

Your email address will not be published.