The flooding damage wrought by Hurricane Ida last week is expected to send car owners back to dealerships to replace vehicles. The timing couldn’t be worse.
For much of this year, the U.S. auto industry has been grappling with a devastating chip shortage that has cut production at dozens of U.S. car factories and left dealerships with little to sell.
Now, those who lost vehicles during the storm are suddenly being thrust into a market where competition for available cars and trucks is already brutal and prices are at record levels. Used-car inventories also are squeezed, as more buyers are turning to preowned vehicles, unable to find what they want on the new-car lot.
“I don’t know where the replacement cars will come from,” said Judith Schumacher-Tilton, president of Schumacher Auto Group, which owns five Chevrolet stores in northern New Jersey. Her dealerships were spared damage, but tow trucks have been arriving this week, dropping off flood-damaged cars from customers.New-vehicle inventory on her properties has been depleted. One store that typically carries at least 250 cars had fewer than 10 this week.
After making landfall on Aug. 30, Hurricane Ida left a path of destruction through parts of Louisiana and then cut through the Northeast, resulting in heavy flooding. Videos from New York and New Jersey on the news and social media show cars stranded, swept away or abandoned in floodwaters.
The number of vehicles lost during Ida is still being tallied, auto analysts and insurance firms say. But past hurricanes, like Sandy in 2012 and Harvey in 2017, have resulted in hundreds of thousands of cars and trucks needing replacement, often leading to a bump in U.S. auto sales in the subsequent months.
This time around, replacement demand could take longer to translate into sales because of the lack of vehicles in stock, analysts and dealers say.
“It’s all pretty distressing,” said Rebecca Lauber, whose new electric Chevy Bolt, purchased at the end of July, was damaged in the flooding. She found her vehicle submerged underwater the morning after Hurricane Ida came through New Jersey.
“I worked very hard to save up the money for the car that I wanted, and in a blink it is gone,” she said.
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The car won’t start and was towed to a salvage yard to be assessed, she said. Ms. Lauber expects the vehicle to be totaled and said she is already fretting about having to replace it. The Piscataway, N.J., resident said she recently drove about an hour out of town to find a dealer with vehicles on the lot.
Flood victims looking to rent a car are also facing challenges. Daily rental firms like Avis Budget Group and Enterprise Holdings Inc. are still short on vehicles, as the manufacturing disruptions have hampered their ability to rebuild fleets whittled down during pandemic lockdowns last year. The constraints have resulted in higher rental-car rates and customers having to scour harder to find an available car.
Ms. Lauber said her insurance company provided her with a rental car, but it was a three-hour drive away in Delaware. Because she didn’t have a car, she said a family member who lives in Delaware had to pick her up.
“This is just adding insult to injury at this point,” said Jessica Caldwell, an analyst for car-shopping website Edmunds.com. “The industry was already in such a tough place, and now these storms seem to be coming more frequently.”
Auto makers have been struggling to fully restock lots after shutting down plants for nearly two months in the spring of 2020, when the pandemic first began to spread in the U.S. A global shortage of semiconductors, used in everything from engines to air bags and media displays, has only further complicated efforts to recover lost productionE