McLEAN, VA - Post super storm Sandy, many organizations are working to figure out what impact the storm will have on the used-car market. The National Automobile Dealers Association (NADA) is one of them, and estimates that prices of used vehicles up to 8 years old will increase between 0.5% and 1.5%,
“The loss of used-vehicle supply and the increase in replacement demand after Hurricane Sandy will have the greatest impact on used-vehicle prices in December,” said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide.
NADA compared Sandy to Katrina, noting that after that storm used-vehicle prices went up by as much as 3%, or $309, during the four months after the storm hit. Although the area hit by Sandy is larger than that affected by Katrina, more recent damage estimates are projecting losses $10 and 20 billion, according to EQECAT, Inc., which is a catastrophe risk analytics company based in Oakland, Calif. The company is projecting total losses between $30 to 50 billion. Losses post-Katrina were $46.5 billion for insured losses, and $145 billion in total losses (in 2011 dollars), according to AIR Worldwide and the National Oceanic and Atmospheric Administration.
“Current estimates for insured and total losses place Hurricane Sandy on average at about one-third of the cost of Hurricane Katrina,” Banks added. “The destruction wrought by Hurricane Sandy was most severe in New York and New Jersey, and supply and demand disruptions will be especially severe in these states.”
NADA did note that import and luxury car are likely to go up due to New Jersey and New York having more cars than trucks and more import brands making up more of the vehicle share of overall sales. The company also said used pickup truck prices will go up due to contractors and other types of service professionals purchasing them in order to replace damaged vehicles and because of supply constraints.