by Christopher Freeburn | November 9, 2012 11:49 am
Hurricane Sandy felled trees, knocked out electricity and flooded coastal areas in New York, New Jersey and Connecticut, but despite online rumors it did doesn’t appear to have damaged hundreds of thousands of cars.
A review of insurance claims filed in the storm’s wake, conducted by the Associated Press, refutes Internet speculation that hundreds of thousands of flood-damaged vehicles would soon end up on used-car lots, with potential buyers unaware that the cars had suffered damage from the storm.
The rumors were fueled by used-vehicle information providers like Carfax, which issued a press release this week suggesting that Sandy had damaged more cars than Hurricane Katrina. The National Automobile Dealers Association estimated that 200,000 damaged cars could end up on used-car lots. But a group of leading insurance companies — including Progressive (NYSE:PGR) and State Farm — have so far reported only 38,000 auto claims in areas affected by Sandy.
While the AP’s review didn’t include a number of major insurers, including Allstate (NYSE:ALL) and Berkshire Hathway‘s (NYSE:BRK.A, BRK.B) Geico, and though more claims will likely be filed in coming weeks, the initial reports suggest that the number of storm-damaged cars will remain a fraction of those hit by Katrina, which flooded about 600,000 vehicles.
Sandy did damage 14,000 new cars that were waiting for shipment to dealers on New York docks, but most of those will be scrapped.
Source URL: http://investorplace.com/2012/11/auto-market-will-not-be-flooded-with-flood-damaged-cars/
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