The auto industry could see an extra bump from those who delayed purchases or need to replace vehicles damaged during Hurricane Sandy, reports Edmunds.com, an online resource for automotive information.
“In Hurricane Katrina, which affected a much less populated area than New York/New Jersey, there were about a half million damaged vehicles,” says Edmunds.com Chief Economist Lacey Plache. “Sandy’s impact may well be higher, but even if 100,000 damaged vehicles are replaced by the end of the year it could boost auto sales three to four percent for the quarter, and that has a positive effect on the economy overall.”
The expected jump in demand will add more sales volume to a part of the country that is particularly important to the industry. Edmunds.com estimates that 20 percent of all new car sales in the U.S. come from the Mid-Atlantic and Northeast region that was affected by the storm.
Hurricane victims who are forced back into the market should find good conditions for buying a new car. The most recent statistics show that the average new car purchase was financed at a 4.1 percent APR in September, which was tied for the second-lowest monthly average since Edmunds.com started keeping records in 2002. Some automakers, such as GM and Nissan, have announced incentive programs specifically for storm victims.
The storm-induced bump in the new car market is just one of many factors that Edmunds.com expects to drive a strong finish to 2012. Increased lease terminations, growing consumer confidence and a recovering housing market are all contributing to a positive outlook for fourth quarter car sales.
Those in the market for a used car may want to hold off on their purchases if they can afford to do so. Edmunds.com projects that used car sales will climb $700 to $1,000 in the short term due to storm-damaged dealer inventories and brief interruptions in the supply chain. Prospective used car buyers are urged to understand the basics of used car pricing and to make sure they know to look out for flood-damaged cars.
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