There are no hard and fast figures in yet, but Hurricane Sandy is going to have a short-term impact on used car prices throughout the Northeast. Expect supply to tighten but beware of predatory used car dealers who might prey on flood victims.
The primary reason is going to be the simple fact that hundreds, if not thousands, of used cars are going to be destroyed because of Hurricane Sandy from North Carolina up through Maine. That's a lot of ground to cover and a lot of used cars.
Those used cars are ultimately going to need to replaced. That once again is going to somewhat tighten up the used car market just at a time when it was starting to loosen up again on the East Coast and throughout the country.
All those used cars are going to be replaced in a small window of time as the insurance adjusters determine values and what cars need to be totaled for flood damage and what used cars are repairable. That flood of checks, pardon the choice of words, is going to create a lot of eager customers and that's going to create a lot of eager used car dealers wanting to take advantage of the situation. That's going to lead for the potential for fraud by some (but not all) dealers.
What's probably going to happen quickly in some areas are dealers who set up what I call traveling road shows. These are basically "too good to be true, once in a lifetime" deals are offered by these companies that travel the country selling used cars at massive promotional events. Basically, a dealer will hire these companies to come in and sell used cars. Sometimes the used cars are trucked in. The salesmen are usually trucked in, figuratively speaking, to help a dealer clear out the lot.
These sales experts (and I don't mean that as a compliment) will come in and do "whatever it takes to sell you that used car today." A lot of the advertising will probably be targeted to people who lost their cars due to flooding.
After all, it seems like the decent thing to do, right? Flood victims need help. Dealers are just standing by to offer them special discounts to get them back on the road. Read that last sentence with the appropriate dollop of cynicism. These deals aren't going to be anything special. Basically, they are just going to be advertising copy rewritten from last summer's special appeal to credit union members.
These predatory sales experts are going to know that flood victims, who will innocently come in saying, "I lost my car in a flood" are going to be anxious to get into a new set of wheels as soon as possible. These flood victims need their cars to get to work, buy groceries, and, well, just live their lives.
Flood victims are not going to have time to do things like run vehicle history reports or get pre-purchase vehicle inspections. As a matter of fact most of these sales are usually four-day events. The predatory sales experts are going to tell the flood victims that there is no time for an inspection.
The sales experts are also counting on flood victims not doing a complete vehicle history report either. Are you a flood victim looking for a used car? Learn how to read a CarFax report and then sign up for a monthly subscription to the service (actually a one-month subscription). Use a smart phone, if you have one, to do mobile CarFax reports on any used car you want to buy.
Beware the used cars that are coming in from out of state. Take a little longer to carefully parse the report and make sure it hasn't been moved a lot recently. That could be a sign that it has problems with its title, as in it might be another flooded car from elsewhere in the country that is being moved to the East Coast to be sold to flood victims. It's worth the investment in a CarFax membership not to become a victim all over again.
The most important thing to remember when dealing with any used car dealer is you are the customer. Use your instincts. A dealer pressuring you into a quick sale is not going to deliver a quality product.
Your best protection is going to be a certified pre-owned vehicle. Consider one if your pocketbook allows.