Like everyone else, auto dealers have been watching the news about this year's onslaught of hurricanes with a weary eye to the future. Moving past the human cost and watching as towns and cities begin to rebuild, many professionals are wondering how these storms will impact the future of the industry and its customers.
Harvey and Irma Destruction
Massive and intensely strong storms like Harvey and Irma wrought destruction throughout several states. The devastation caused by the storms simultaneously created thousands of customers suddenly in need of a new car while wiping out large chunks of the local inventory.
Insurance claims for cars damaged by the storm have also wiped out local inventory options. This is a problem in any major US city. But the fact that Houston and other areas in Texas have a higher rate of car ownership than the national average makes it a bigger problem than it has been in the past.
Influx of new cars
While dealerships in the affected areas work to acquire stock through national auctions and other avenues, the local economy struggles and the sudden uptick in national demand drives the overall prices up, squeezing profit margins and budgets alike.
The hope is that the influx of new cars from lease ends and other avenues throughout the country will balance out some of the surge in demand to prevent prices from climbing too high.
Storm-damaged cars being sold
There are also concerns about water and storm-damaged vehicles eventually winding their way back into the used car inventory. After Hurricane Katrina and Hurricane Sandy, there were several reports of storm-damaged cars being reconditioned and sold on the used car market without giving customers the full details of the car's history.
The full effects of this year's hurricane season may not be fully realized for several more months. The number of cars available and the quality of those cars remains to be seen in the aftermath of these events. The hope now is that the industry can recover quickly, as hurricane season is in effect through November.