Hurricane Harvey’s record-shattering flooding and rainfall — not to mention 120-mph winds whipping debris across Texas and Louisiana — could wreck more than half a million vehicles. And the used-car market could feel the biggest impact from the sudden surge in demand for autos, said Steven Wolf, chairman of the Houston Automobile Dealers Association.
“It’s supply and demand,” Wolf said Wednesday on CNBC’s “Power Lunch.” “And obviously there’s going to be a tremendous demand for vehicles. I think that you’re going to see some price pressure on used cars.”
Wolf said that he doesn’t foresee the same effect occurring with new cars, however.
“I think new cars are going to maintain because of the additional incentives that manufacturers are going to offer. The banks are buying extremely deep right now, the manufacturers, even pre-disaster, were offering incredible incentives, and I think those incentives are even going to get better,” Wolf said.
An estimated 500,000 cars could be totaled from the storm, according to Cox Automotive. Such a disruption could magnify recent used-vehicle trends: The Manheim Used Vehicle Value Index shows that used-car prices have approached record highs in 2017, CNBC’s Phil LeBeau reported Tuesday.
Wolf expressed confidence that auto insurers — which he distinguished from flood insurers, whose coverage is an open question for thousands of Harvey’s victims — will “send more people down there to help with the claims.”
“The insurance companies are going to step up and do the right thing and get these claims handled quickly,” Wolf said.