The estimates for damages sustained in the Northeast during Hurricane Sandy have reached billions of dollars and confirm the initial reaction of many online observers scrolling through the photo galleries of destruction – most memorably, cars floating down the street. Still to be determined is how the estimated 230,000 lost or damaged vehicles will be replaced – and at what price. But there’s no question that the impact to the industry is nationwide. The affected area accounts for over 20 percent of overall vehicle sales.
To bring this situation home, look at your current inventory not through a microscope, but a macro-scope to get the big picture. The pressure of used car demand is driving up wholesale prices so you could be ahead value-wise, certainly in the next few weeks. The upward price movement is a fluid condition that managers must monitor carefully, especially with the biggest sale week of the holiday season still ahead.
One other big picture positive I feel emerging is that fact-based used car shoppers are also aware of the supply and demand condition created in the wake of the storm – a situation that continues to get coverage online and on the networks. This can bring great results, but it is even more reason to make sure you are ahead of, or certainly anticipating, price movement across the board.
Here’s an educated guess: The used segment would have seen an uptick even without this “perfect storm.” I believe the fact that vehicles currently on the road are, on average, 10 years old was going to boost used car pricing anyway. As you will read in Strong’s December newsletter, our market is driving on borrowed time. Take a long look through the macro-scope because now is the perfect time to focus on your used car big picture.