New and used car prices may be on the rise once again, thanks to a natural disaster. Hurricane Ida swept from Louisiana all the way to the Northeastern U.S., destroying thousands of cars. Much of the damage occurred in flooded underground parking garages.
The timing couldn’t have been much worse, especially as demand for new cars has mostly recovered from the near halt of sales during coronavirus restrictions last year. Automakers continue to struggle to source car parts, including computer chips necessary to build new vehicles, resulting in historically low inventories on dealer lots.
New car prices have reached record highs for the better part of 2021.
Compounding difficulties for drivers, those whose cars were damaged or totaled from Hurricane Ida’s winds or flooding struggle to find rental cars. Last year, rental car companies sold off thousands of cars due to plummeting demand when travel came to a near standstill. Like consumers, rental car companies have struggled to find vehicles to refill their fleets.
“With new and used car inventory already low, a weather event like Ida will only hurt when it comes to prices,” said Autotrader Executive Editor Brian Moody. “In what was already a challenging market, Ida has eliminated a portion of the available cars. The result will likely be increased demand for certain types of vehicles compounded by even lower inventory. The low supply and high demand will put even more pressure on prices of both new and used cars.”
CNN spoke with Carfax, which creates vehicle history reports used by dealers and consumers, and insurance industry estimator AIR Worldwide. The two firms suggested upward of 200,000 cars will eventually be totaled due to damages incurred by Hurricane Ida.
A car that is totaled, or written off by an insurer, as a result of a flood can be resold if repaired to individual state standards, though the resale value is lower and problems may lurk for years to come. Find car models for sale