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Kelley Blue Book and Autotrader Say Superstorm Sandy's Impact on the National Automotive Market Will Be Modest at Best
The impact of Superstorm Sandy on the national new and used car markets may be more modest than what's currently being reported, according to data and analysis from experts at both Autotrader and Kelley Blue Book (KBB.com).
Current estimates state between 200,000 and 300,000 new and used vehicles were destroyed as a result of the storm; however, that only represents 0.1 percent of the more than 240 million registered vehicles on the road.
"There's absolutely no question that Superstorm Sandy has had a devastating impact on those who live in the Northeast," said Chip Perry, president and CEO, Autotrader Group. "I've personally visited the area and spoken with many of our field sales representatives and customers, and it's clear that this event changed many of their lives."
Perry continued, "But when you look at the impact on the automotive industry, the fact is, the number of vehicles lost is too small of a fraction to significantly move the national market."
Data and analysis from the November Kelley Blue Book Market Report supports this position. Since the storm hit so late in the year, KBB.com analysts believe increased demand on the East Coast will only mute the market's typical decline through this time period. Instead of a 1 to 2 percent decline, KBB.com experts now believe values will remain flat nationally. From a used car pricing perspective, KBB.com Senior Market Analyst Alec Gutierrez anticipates only modest market increases, $200 to $300 at most, isolated mainly in the Northeast region.
"When Hurricane Katrina hit, Kelley Blue Book® Values increased more than 2 to 3 percent in the affected area from the time the storm hit until year-end," Gutierrez said. "This year, we believe that while we may see some price appreciation on the East Coast, from a national perspective, values will remain relatively flat."
Shopping activity on Autotrader in the areas impacted by Sandy dipped several percentage points between October 27 and November 6, (during and immediately following the storm), but rebounded by Nov. 8 to mirror the level of shopping activity in non-impacted areas. On November 10, shopping activity began to increase very slightly nationally and in the impacted areas, however, Autotrader analysts believe it's still too early to assess if this is indicative of a more sustained trend or if the rise can be directly attributed to Superstorm Sandy.
Both KBB.com and Autotrader analysts agree that the impact of Superstorm Sandy is just now starting to be felt in the market and it will take months before the total effects will be fully comprehended.
"It's going to take time for impacted consumers to get back in the market," Gutierrez said. "Some may have been able to get a replacement vehicle immediately, but many others could be waiting for their insurance check or unfortunately have to focus on repairing damage to their home. We're going to be keeping a close eye on this in the months ahead."