Wednesday, October 31, 2012

Buying a New Car - Not One Flooded By Super Storm Sandy You're Not

There was a dirty little secret in the used car auto auction business that when there was a flood in one area, those cars flooded-out would be shipped to another region after they had been completely detailed and cleaned up. Then they'd be sold at auto auctions and end up on used car lots. That's unfortunate because they'd have mold inside, rust starting, and were just a nightmare of problems for the new owners. Then eventually this practice got exposed.

Thus, when Hurricane Katrina came along authorities were already well aware of this and were out looking for those who might take advantage of unsuspecting car buyers. Those cars were thus, crushed, and marked by VIN number as salvage, or to be demolished, over a half million cars in fact.

Today, at the end of 2012 our nation was hit by a late year Hurricane broken apart, but with energy remaining, it combined with a very large cold front and became what was later rebranded by the media as a Super Storm. Hurricane Super Storm Sandy hit the Atlantic coast in New Jersey near Atlantic City on October 29, 2012 - a freakish storm, just days before Halloween. Caught off guard 100s of thousands of cars drowned.

There was an interesting article in MSN Online News on November 7, 2012 titled; "Sandy Spurs Toyota, Honda, Chrysler to Scrap Vehicles," by Alan Ohnsman and Craig Trudell. The article stated that 15,000 new cars were flooded out 6,000 of them were Nissans. Some 200,000 used cars from individuals got flooded, but that's still far short of the 600,000 in New Orleans the article also noted.

Interestingly enough, the Detroit Free Press predicted; "Used-car prices expected to rise after Sandy's destruction of 250,000 autos," in a reprinted article from the LA Times on November 8, 2012 by Jerry Hirsch. Indeed, having been in the auto industry all my life, I'd say that's about right. But, let's not forget all the Rent-a-Car run-outs which went up to their trade-in miles hitting the auto auctions which were rented to allow people to escape the cities and evacuate, many took them to states fairly far away, as the storm was 800-1000 miles wide remember?

All in all, however this will increase used car sales and new car sales, and that simple fluctuation of supply and demand will have upward pressure on the car market. Just be careful that you didn't get a drowned-out car that slipped through the cracks. One way to tell is to look for signed of water line marks inside of the tail lights or headlight covers. Sometimes the auto detailers are not remembering to clean there, and that is a dead give-away.

Lance Winslow has launched a new series of eBooks on the Mobile Auto Services Business. Lance Winslow is a retired Founder of a The Oil Change Guys, a Nationwide Franchise Chain, and now runs the Online Think Tank;

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