Hurricane Sandy Churns Up the New and Used Car Markets
Hurricane Sandy not only scored a direct hit on one of the most populated regions of the country, it also landed a blow to the part of the country that accounts for about 20 percent of all car and truck sales in the United States, according to Edmunds.com.
"The storm likely will have an impact on October sales, especially since it comes at the end of the month, but those sales won’t disappear altogether,” says Edmunds.com Sr. Analyst Jessica Caldwell. “If anything, it’ll make November an interesting month to watch, not just for the deferred sales, but also because hurricane-damaged vehicles could unexpectedly force several buyers back into the market."
Though automakers will lose a few sales days in October and November, that may not translate into a huge sales loss or great incentives for buyers in November. "Even though the storm will cause shoppers to postpone buying in the affected areas, we do not anticipate a drop in October or November car sales," says Jesse Toprak, senior analyst at TrueCar.com. "In fact, November sales may experience a small boost if the number of damaged vehicles is significant due to the replacement demand."
When it comes to used cars, analysts don't anticipate any effect on sales as a result of the storm. "Typically, used vehicle sales taper off during the last quarter of the year as people are spending on other holiday events and gifts," says Edmunds.com Analyst Jon Piol.
Though the storm may not have much of an impact on used car sales, buyers looking for a used car in the coming weeks may need to be extra careful when selecting the car, as a flood of storm-damaged cars may hit the used car market. "Even though these vehicles need to be re-registered as flood damaged, this is not always the case," says Toprak. "Many flood damaged vehicles end up getting shipped to different parts of the country where consumers typically won’t think about flood damage when buying a used car."
To avoid buying a car that's been through a flood, make sure that you get a vehicle history report, which should tell you if any insurance claims have been filed on the car. On the car itself, signs of flood damage include a musty smell and moisture in hard-to-reach areas, like the engine bay or headlights. Cars with recently replaced carpets or trunk liners may be hiding flood damage. As with any used car, it's important to get a detailed inspection by a qualified mechanic. If you're worried about flood damage on a car, have the mechanic pay close attention to the electrical system, which often bears the brunt of water damage.
Shopping for a new or used vehicle? Take a look at our rankings of the best new cars. For used cars, check out our Used Car Rankings, where you can compare used cars by class, model year and budget. Then, look for a great deal on a new car by checking out this month’s best car deals. You can also find the best local prices in the area by using our Best Price Program. Also, be sure to follow us on Twitter, Facebook and Pinterest.