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Sandy expected to drive up used-car prices

Some unscrupulous dealers may try to foist storm-damaged vehicles onto unsuspecting buyers.

By Claire_Martin Nov 12, 2012 12:38PM

Wind and water whipping through the streets and parking lots of East Coast states last month have left drivers in need of replacement vehicles and dealers with a dearth of cars to sell. Experts expect used-car prices to rise in the coming weeks as a result.

 

If past is prologue, vehicles with a vintage of eight years or less could sell for up to 1.5 percent more, according to a prediction by the National Automobile Dealers Association. This estimate is gauged against what drivers in the New Orleans area saw in the wake of Hurricane Katrina.

 

NADA’s percentages would translate to an average of $50 to $175 more for used-car buyers. It could be a conservative estimate, according to other industry experts. Edmunds predicts a $700 to $1,000 increase in used-car prices in the short term.

 

Particularly vulnerable to higher sticker prices are automobiles typically used for work purposes, such as pickup trucks. The urgency of replacing those vehicles will likely drive up prices more substantially.

 

Another potential headache for car buyers across the country is the possibility of damaged cars surreptitiously infiltrating used-car inventories. Buyers could end up driving away in vehicles that seem to be in good condition but whose engines and interiors were doused with saltwater.

 

Some unscrupulous car dealers tried to pass off storm-ravaged cars after Katrina in 2005 and Hurricane Floyd in 2000, saddling drivers with vehicles that fell apart soon after purchase.

 

To avoid such scams, consumers should look out for condensation on a prospective vehicle’s instrument panel, water lines in the engine compartment or trunk, and rusted bolts.

 

[Source: US News & World Report; Photo: Rob Gross/Flickr]

12Comments
Nov 15, 2012 9:38AM
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There are unscrupulous dealers in NY and NJ? How can that be? Is it because of the proximity to Washington, DC?
Nov 15, 2012 9:45AM
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I  have been  a  used  car  dealer  for  the  last  22  years,  and  the  industry  is  still reeling  from  the  ill fated  "cash  for  clunkers  "  program.  I  don't  think   Sandy  will  have  as  much  effect  as  the c  for  c   program  did.    The  reason  is that Sandy  is  more  of  a  regional  problem.
Nov 15, 2012 9:23AM
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The  fed's program, cash for clunkers, already did that.  Maybe Sandy will have an impact, but it will for sure put some damage vehicles on the market--buyer beware.

Nov 15, 2012 10:06AM
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no they will just ship them out west smoewhere like az.or cal
Nov 15, 2012 10:12AM
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By law,  (at least in California),  dealers that sell used cars must run a national motor vehicle title information system  (NMVTIS) report before vehicle is sold. This information must be given to the buyer at time of the sale. As much press there was about Katrina flood cars, we saw very little of them at the dealer auctions here. Dealers generally will not buy branded title vehicles, due to financing issues, liability issues etc... If you buy a car at a public auction or salvage auction you will get a bag of problems with that good deal.  Will prices go up? Hell, they never really went down.
Nov 15, 2012 10:20AM
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Wow! Kick the people in the gut where it hurts huh? Raise prices on people who are already hurting from being slammed by this storm. I would say that is just unhuman to do that to people who are already suffering. Usery and gouging the community, I would not buy any used cars from anyon in that town. I would go to another county or state.

Nov 15, 2012 11:03AM
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It seems like where ever there is any type of disaster, wheather from storms-fires-earthquakes etc. there is always some people that  try to take advantage of others. The old saying "what goes around will eventually come back around" is true. It just take longer sometimes.  Why can't people just treat others the way thay would like for others to treat them
Nov 15, 2012 10:09AM
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Flooded cars that had no comprehensive coverage on them are the ones that will be sold.  The insurance company will refuse to insure a vehicle that was totaled out due to flood.  But if there is no claim, the cars will be moved, cleaned and put in "working" order.  Then they will be sold....but salt is corrosive and they will  break down repetitively until they are sold to the next unsuspecting person. 
Nov 15, 2012 11:58AM
Nov 15, 2012 11:38AM
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cash for clunkers was a huge boost to the new car industry but awful to independents, at least initially. c for c drove up demand while limiting supply.  the market adjusted, as it always has.  reality is, washington has nothing to do with the used car industry's market position unless introducing programs like c for c. i'm curious though. when  natural disasters present these kind of issues (limited supply), how quickly do the book values adjust?
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