Hurricane Harvey has devastated the Gulf Coast this week. Over 4 feet of rain have fallen on the area. Early estimates from ABC News show nearly 200,000 homes have been damaged by the storm so far. 364,000 people have requested assistance from the Federal Emergency Management Agency (FEMA). Once the flood waters subside, it will be months or even years before the Houston area gets back to normal.
Harvey’s wrath will also affect the auto industry. Cox Automotive estimates the total cost of vehicles lost to flood damage to be nearly $5 billion in the Houston market alone. As insurance claims are completed, thousands of people will need new (or used) vehicles. The impact on the automotive industry will be felt nationwide, especially for used cars. Wholesale values for used cars have been high the last few months and the storm damage will increase the demand factor for used cars. This should keep values high as the supply of vehicles decreases from the increased demand. In addition to increased values for these vehicles, buyers will also need to be aware of a “flood” of damaged vehicles entering the market.
The cars that have been damaged by Hurricane Harvey have to go somewhere too. Most will probably end up in scrapyards due to age or condition; but others will find their way into the wholesale market. These vehicles are supposed to be listed as “salvaged” on their titles, but that isn’t always the case. Both auto dealers and individual buyers should be careful of buying these cars that look fine, but have severe electrical, mechanical, and corrosion problems.
If you would like to know what to look out for when purchasing a car feel free to comment below, or email me dallasautoblog@gmail.com.
The Sporadic Post 
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