Used car prices expected to rise after Sandy

Storm Sandy totaled tens of thousands of vehicles, and that’s expected to raise prices for used cars across the country.

The Northeast is still picking up the pieces from Hurricane Sandy and the nor'easter earlier this week. Many people are still without power and thousands of homes were damaged. On top of that, an estimated 250,000 cars were totaled, a pile up that could affect American consumers across the country.

Hurricane Sandy is expected to tack $200 to $300 onto the price of a used car, according to Jonathan Banks, executive automotive analyst at the National Automobile Dealers Association, or NADA. "Many vehicles are going to be destroyed meaning that many consumers are going to have to replace their cars."

Some people will opt to buy used cars, and that will put the squeeze on an already tight supply, says Richard Arca, a senior analyst with Edmunds.com: "The problem with used cars over the past couple years is a lack of inventory."

That's because many Americans put off buying new cars during the recession. Now the number of used cars seven years and younger is at an all time low. 

Used car buyers all over the country will feel the impact, says NADA's Jonathan Banks, "This impact will wash across the whole country and people will feel the price increases even as far out as California."

Auto dealers in storm-hit areas will start pulling in used cars from all over the U.S. to meet the spike in demand. Banks says we’ve seen this before. Hurricane Katrina pushed used car prices up three percent nationally.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.
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In 2006 GM sold more cars that year than any year in its entire history. Then sales fell in 2007 and and again in 2008 and finally GM went bankrupt in the money crunch. Seems like time to open some of those great GM plants like Janesville, Wisconsin. We need more new cars for sale. GM's huge production volumes kept plenty of cars on the salesfloor and that kept used car prices lower. Not that Paul Ryan deserves an ounce of credit for this idea but Janesville is his base. Wisconsin has an outstanding high quality work force.

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