lesz

I read a couple of interesting articles this morning about the effects of Hurricane and Tropical Storm Harvey on car sales.

The prediction is that a half million or more cars will have been destroyed by the hurricane and subsequent flooding. Historically, during the period of time following hurricanes, there is a increase in car sales when those who have lost their vehicles are buying replacement vehicles.

During the period of time after a this storm, it is likely that manufacturers will be diverting some of their car shipments from dealers in other parts of the country to the Texas area to meet the demand from buyers seeking to buy replacement vehicles. Further, dealers in other parts of the country may even be selling cars from their inventories to dealers in the Texas area. The result of higher demand for new cars and of potentially lower supply because of reduced inventories is likely, therefore, to lead to smaller discounts from MSRP and a spike in new car prices.

While this phenomenon has occurred after other hurricanes, it is likely to be more pronounced this time because of the huge number of cars that will have been destroyed by Harvey. For example, the prediction of half a million destroyed cars is twice as large as the number of cars that were destroyed in Hurricane Sandy.

It will be interesting to see if all of this effects the prices remaining 2017 ESs and, also, pricing of the 2018 ES when those cars start to hit the showrooms soon.

Another unfortunate phenomenon that is likely to occur is that there will be some who are lacking in scruples and who will try to make superficial repairs on less severely damaged flooded cars. Then, they will move those cars to other parts of the country to try to sell them to unsuspecting potential buyers. While many of those cars may initially seem to be okay, down the road, often damage to the electronics and mechanical components of the cars will manifest itself, and the cars will become virtually worthless.

EJC

I'd more concerned with cars that are flood damaged showing up and being sold as new, untouched cars when they should have been trashed.
Once again time to be careful.

LexBob2

I agree and with so many vehicles effected some of them will no doubt work their way out of the Houston area into other markets.

lesz

Even though it will be a good while before people who have lost their cars will be able even to start thinking about replacing them, I'm confident that dealers in the storm area are already planning for how they will be able to get enough cars to meet the demand that will be coming.

Besides the new car market, there will also be a significant effect on the used car market. I'm sure that used car managers in and near the flooded area are already looking for sources of used vehicles to fill their inventories, and many will likely be looking to buy used cars from out of the area. So, it is likely that there will also be a spike in used car prices because of increased demand for them.

lesz

It happens after every hurricane and/or major flooding incident. Those who want to try to sell such flood-damaged cars will often attempt to sell them in other markets where flooding is never or only very rarely an issue because they know that buyers in such markets are much less likely even to consider the possibility that they might be buying a flood-damaged car.

Buyers of both new and used cars throughout the country would be wise to check the histories of any car that they are considering for a purchase. I don't think that I'd be likely to consider buying any car, new or used, in the near future if that car came from Texas or Louisiana.

I'm also confident in predicting that, 6 months from now, there will be some posts on this and other boards from people who bought cars and who, shortly thereafter, experienced mechanical and electrical problems and, then, discovered that they had bought a flood damaged car.

gmanusmc

This is too much to wrap your head around - makes us stop and think about how trivial life's little annoyances are.

pondfisher

I had a co-worker whose father in law lived in North Mississippi and owned a junk yard in Memphis. As part of his business he owned a mobile car crusher that he used for crushing / recycling cars. He started out with an EPA government contract crushing cars in illegal rural junk yards making big $$$. I am not sure of all the details but I remember he went south right after Katrina and made more big $$$$ again crushing cars for the EPA and insurance companies. Strictly enforced to not remove any parts all were crushed and recycled. If you see a mobile car crusher for sale it might be a good investment if you live close to Houston. No doubt there are cars that escaped the crusher and sold to unsuspecting buyers. Buyer beware!!

bc6152

Found this article on destroyed vehicles and how it will be handled. article says that 50% of the flooded cars will be resold and others will be moved to other states and a clean title created.
https://finance.yahoo.com/news/harve...100000615.html

Maikerusan

There's a major hurricane, people are flooded, lives are ruined, and we want to talk about how it affects prices on our pet car? Hmm.

bc6152

Well, after all, this is a car forum and we comment on cars.

lesz

I have genuine compassion and sympathy for those who have lost their lives, for those whose property has been destroyed, and for the millions of people who, at a minimum, will have had their lives disrupted, possibly for years. I've already made a generous donation to the Red Cross for its flood victim relief efforts.

Part of the reason why I posted this thread is that, as Bob said, this is a car forum, and information about the storm's effects on pricing might be useful to those who are anticipating an ES purchase, but I also thought that it is important to talk about the certainty that there will be those who will try to unscrupulously profit from taking flood damaged cars to other parts of the country and by subsequently selling them to unsuspecting buyers. If threads like this can make some aware of this reality and can help them to avoid buying such a flood damaged car, the thread will have served a good purpose.

Whether a topic like this is discussed or not will not make things any better or any worse for those who are victims of Harvey, and I take offense at the suggestion that a discussion like this indicates lack of sensitivity or concern for the victims of the storm or a lack of willingness to make a contribution to help the storm victims.

gmanusmc

Unfortunately, flood damaged vehicles is an actual by-product of disasters like this. We can choose to stick our head in the sand and ignore it or be aware of it and be as informed as possible. From what I see, most members here choose to be as informed as they can be on a variety of subjects.

LexBob2

less and bgaerttner make good and valid points, being aware of this issue doesn't relate to the concern for the effected areas and their residents. Unscrupulous sellers who would try to sell flood damaged vehicles in other areas would have no qualms about turning around and trying to sell them in the effected areas so it's important for everyone to be aware of the issue.

Maikerusan

Thanks, but obviously I know that.

I just find it a bit in bad taste.

morgan1819

Nope, it's not in bad taste. This a car forum.

Everyone on here has empathy for those affected by the hurricane.

( you certainly have a right to your opinion, though ... there is room for everyone )