A superstorm unlike anything the East coast has ever experienced, Hurricane Sandy has caused a dramatic loss of lives and property. In particular, salt water damage to vehicles have caused a significant supply drop for the used car market. What's more, scores of victims that are trying to rebuild are causing a rise in demand as well, a combination that is causing analysts to expect prices to spike by as much as $1,000 a vehicle across the country.
According to the National Automobile Dealers Association, approximately 100,000 to 250,000 vehicles were lost from the storm.
Car sales, which traditionally peak during the summer season, are now enjoying a second wind this winter. According to Paragon Honda general manager Brian Benstock of Queens, New York, "This weekend is very busy." According to Benstock, at least half of the buyers walking in are looking to replace their storm-damaged cars.
As a rule of thumb, economists believe the national spread in used car values are up by 2 percent. That is, a car valued at $10,000 is now sold for $10,200.
Adesa Analytical Services executive vice president Tom Kontos also added his thoughts on the state of the Sandy aftermath: "It's Definitely going to raise used car demand. It's going to keep prices higher than it otherwise would be."
While Hurricane Sandy has certainly modified the conditions in the used car market this season, Manheim Consulting's chief economist Tom Webb believes that the conditions will merely be temporary. In fact, the vehicle impact caused by Sandy isn't nearly as bad as the situation was for Katrina many years ago.
