Expect used car prices to rise nationally because of Hurricane Sandy. The storm destroyed about 250,000 used vehicles on the East Coast, and maybe more, according to estimates by the National Automobile Dealers Association. That puts pressure on what already is a tight supply of good-condition, late-model used cars and could push prices for such vehicles up by 0.5 percent to 1.5 percent in December, said Jonathan Banks, an analyst with NADA.
The dealer group said that amounts to a little more than $50 to $175 for the average used vehicle. Auto information company Edmunds.com projects a higher estimate, saying that used car prices will climb $700 to $1,000 “in the short term."
While this will be felt most keenly on the East Coast, the rest of the nation is not immune, Banks said.
“We have seen a trend for dealers, regardless of where they are located, buying inventory online and that means that geography is not as important as in past," he said. “It used to be that dealers would buy cars from a physical auction near their dealership."
Pulling such a huge number of vehicles out of the U.S. fleet will have an impact at the national level, Banks said.
The problem is compounded by at least tens of thousands of new cars that were destroyed both at dealerships and storage yards in the New York and New Jersey areas hit hardest by the storm.
All of this is going to create problems for consumers in the region who need to replace their rides quickly.
“Prices could really shoot up for consumers buying cars right away, because they will run into a severe inventory shortage," Banks said.
