Tow truck driver Alex Toll transports vehicles damaged by Hurricane Harvey in Houston. Photo credit: REUTERS
Used-vehicle buyers replacing rides lost in hurricanes Harvey and Irma are boosting prices and trimming inventories, but the end of the storm surge is in sight.
October has been a big month for used-vehicle sales, but industry watchers expect the post-disaster replacement surge to play out by the end of November. Virtually all of the lift has come from Harvey and Irma, with hardly a ripple caused by Hurricane Nate and California wildfires.
Still, it has been strong enough to temporarily lift used-vehicle prices by reducing abundant stocks.
"Used-vehicle prices are reflecting a surge in demand and a tightening of supply," Cox Automotive Chief Economist Jonathan Smoke said. "It's continuing in October but starting to slow down."
Smoke: Storm felt across U.S.
In September, Cox's Manheim Index of used-vehicle prices rose 6.3 percent and retail used-vehicle prices measured by Dealertrack, another Cox company, also rose 6 percent, Smoke noted.
Through the first half of October, Manheim tracked higher prices and 1.4 percent more used-vehicle sales volume, but "half of what we saw in September," he said.
Wholesale used-vehicle prices rose 2.9 percent in September to an average of $11,046, ADESA Analytical Services said. ADESA Chief Economist Tom Kontos noted prices were "bolstered by dealer demand in the hurricane-stricken regions" of Texas and Florida, comparable to the 2012 aftermath of Hurricane Sandy in northeastern Atlantic states.
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