Hurricane Sandy is being blamed for used-car prices surging by as much as $1,000 a vehicle, USA Today reports.
As many as 250,000 cars were destroyed in the deadly storm along the East Coast, according to estimates from the National Automobile Dealers Association.
"This weekend was extremely busy,” Brian Benstock, general manager of Paragon Honda in Queens, N.Y., told USA Today. He believes around half the buyers at his dealership were those who lost vehicles from Sandy.
The storm adds pressure to a used-car industry that has seen fewer late-model cars in good condition, according to Jonathan Banks of the NADA. Car buyers' research website Edmunds.com projects used-car prices will climb $700 to $1,000 "in the short term."
"It's definitely going to raise used-car demand," says Tom Kontos, executive vice president for Adesa Analytical Services. "It's going to keep prices higher than it otherwise would be."
East Coast suppliers and buyers may feel the effects of Sandy more than the rest of the country, but a national ripple effect is anticipated because of the way used cars are purchased by suppliers in the age of the Internet.
"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 the past," he said. "It used to be that dealers would buy cars from a physical auction near their dealership.”
The new-car market is also not immune to Sandy’s wrath. Toyota lost around 4,000 new vehicles and Ford lost around 800 in the storm.
One trend some dealers are noticing is that people getting checks from insurance companies to cover their vehicle costs are not automatically buying replacement used cars. Some are opting for new wheels. "A lot are finding they can get into a new vehicle for less" than they expected, said Benstock.
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