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

Closing numbers gained’t be out there for months, however one factor is definite: An amazing variety of drivers in Hurricane Ian’s path might be changing a automobile at a time when inventories are already tight.

“We’re anticipating greater than 300,000 destroyed autos from Hurricane Ian,” says Mark Friedlander, Florida-based director of company communications for the Insurance coverage Data Institute, citing early harm stories from Florida, North Carolina and South Carolina.

Ian crashed ashore to flood, smash and carry away numerous autos. Whereas selecting up different items of their lives, hurricane victims are left looking for rental automobiles, submitting auto insurance coverage claims (if that they had complete protection) and beginning the seek for substitute autos.

Friedlander says primarily based on estimates, Ian could possibly be the second-largest automobile loss occasion on report within the U.S. That will place it behind solely Hurricane Harvey in 2017, when 500,000 autos had been destroyed.

The national car market has been in chaos for greater than a yr. Provides of latest and used autos have been restricted, as a consequence of pandemic-driven supply-chain points and semiconductor chip shortages. With automotive producers unable to satisfy the demand for brand spanking new autos, automotive patrons depleted used-car inventories. This scarcity pushed automotive costs, in addition to automotive funds, to report highs.

In September, it appeared that automobile inventories had been stabilizing. Cox Automotive, an automotive market and information firm, reported that used-car provide was returning to regular and used-car costs had been beginning to drop. The stock of latest automobiles, whereas nonetheless under pre-pandemic ranges, had improved and closed August at its highest degree since June 2021.

Auto dealerships in Florida are working to satisfy the elevated demand, with some automotive producers committing to ship extra new autos than regular to affected areas. Many dealerships are additionally promoting $1,000 or extra in reductions for these changing autos broken by the storm, in addition to delayed first automotive funds.

In an Oct. 11 information launch, Cox Automotive predicted new automobile inventories will stay tight, so about 80% of Ian substitute autos might be used. The excellent news, from a market perspective, is that the majority of this exercise is predicted to happen inside just a few months and “won’t noticeably influence nationwide used-vehicle retail gross sales.”

Photographs of hurricane victims with their lately bought automobiles are beginning to seem throughout social media, and most additionally point out the issue of discovering a automobile and paying a excessive worth. As extra individuals settle insurance coverage claims, demand will possible improve additional.

Matt Degen, senior editor at Kelley Blue E-book, says shopping for a automotive exterior of storm-damaged areas is one choice, with most vendor inventories out there on-line. “They will purchase a automotive from out of state and have it shipped. Often the dealership will work with patrons on registration and ensuring the whole lot is appropriate with their state, in order that’s normally not a difficulty.”

On-line automotive retailers are additionally making ready to satisfy doubtlessly elevated demand for autos in areas affected by Ian. Nicole Rappaport, spokesperson for CarMax — the most important used-car retailer within the U.S. — mentioned in an e-mail, “Our community consists of greater than 40,000 autos of almost each make and mannequin that prospects in these impacted areas have entry to and might have them delivered or transferred to their nearest location.”

For individuals who need a new automobile and do not thoughts ready, ordering a built-to-order vehicle from the manufacturing facility could possibly be an answer. It could even be a option to keep away from vendor markups.

In the event you’re a automotive proprietor changing a automobile after a hurricane or different catastrophe, you must take a number of steps to guard your self.

You’re not lined for storm harm until you carry complete auto insurance coverage, which compensates you for the worth of your automobile on the time of its loss, minus any deductible.

With automotive values skyrocketing prior to now yr, what your automotive is price may shock you. You may analysis the automotive’s true market worth utilizing pricing guides like Kelley Blue E-book or Edmunds, and dispute an insurance coverage firm’s supply if it appears low. Trying up the true market worth can also be necessary when shopping for a automotive, so you understand that you simply aren’t overpaying.

Lastly, watch out for flooded autos which have discovered their means again into the market. Degen says unscrupulous sellers attempting to unload previously flooded autos is all the time an issue after disasters like Ian. Whereas these automobiles ought to have flood or salvage titles, that isn’t all the time the case.

Degen recommends getting an AutoCheck or Carfax automobile historical past report, which normally reveals any flood title issued. Once more, make sure to seek the advice of pricing guides to examine the automotive’s honest buy worth. If a vendor is asking a lot much less, that ought to increase suspicions.