Superstorm’s impact may be felt at car dealers in Naperville
By David Sharos For The Sun November 15, 2012 11:44AM
Updated: December 19, 2012 12:34PM
In the wake of Superstorm Sandy, thousands of residents throughout the East Coast were impacted by power loss, food shortages and lack of shelter, not to mention the millions of dollars’ worth of property destroyed.
But in the days that have followed, another issue which could impact residents here in Naperville involves the untold number of vehicles that news footage has shown floating in sea water, which some sources say could impact the supply of used cars across the country.
With supplies down, prices generally go up. And to compound matters — what if those floating cars damaged by sea water enter the pipeline of the used car market?
Naperville dealers confirmed that car prices are likely to increase in the wake of the storm but that selling salt-corroded vehicles would be a difficult task.
“With the Car Fax auto checks and the fact that vin numbers can be used to identify where cars came from, I’m not sure a lot of damaged cars are going to pop up in the Midwest,” said Fair Oaks Ford-Lincoln used car sales manager Sam Santoro. “We monitor things well, and there aren’t as many cars sold at auctions, in that a lot of dealers got out of the lease market. I personally don’t trust a lot of the technology out there. I like to go and look at the cars and inspect them myself.”
Sales manager Ed Piet, who works at Naperville Jeep/Dodge, said it is unlikely cars damaged from the East Coast would make it into the Midwest pipeline as most dealers work with local suppliers or buy during factory authorized sales.
“We get the majority of our cars from trade-ins or through the factory, but these water damaged cars should have ‘flood titles’ issued on them and declared a loss,” Piet said. “It’s unfortunate that people there lost their vehicles and that many of them are probably going to have to replace vehicles ahead of the normal replacement cycle they are used to, but it’s actually a good thing for the car business. If the cars were late model, people will probably have to put a little money into them and wind up with a brand new car and not something pre-owned.”
The timing of Superstorm Sandy may actually have both a positive and negative effect on the local used car market, argues Chevrolet of Naperville General Sales Manager Wayne Michor. Supplies of used cars, he said, are going to be impacted, at least in the short term, “because dealers in the East Coast have 100 percent of nothing to sell.”
“Cars are bought all over the country using the Internet, and we buy at least 100 of them a month that way,” Michor said. “Because the dealers on the East Coast have to have cars, they’re going to have to pay more at the auctions to get them. By taking away some of our supplies in the Midwest, it will impact the cost here as well. But the good news is we’ll likely be offering more in trade for people who are looking to buy new.”
Brian Napleton, owner of Napleton’s Valley Hyundai in Aurora, believes that so far, Superstorm Sandy has not had an impact on used car sales or prices in the Midwest.
“Everything is dictated by the market, but for the present there hasn’t been an impact here on the local used car market,” Napleton said. “Here at this dealership, our new versus used cars sales are about 2 to 1. It remains to be seen whether there will be any residual effects from the storm, but for now, we don’t see it.”
Napleton would not comment regarding damaged cars getting into the pipeline but the manager of Naperville’s White Eagle Auto Body Shop Daniel Resenbiz remains skeptical about the fate of the East Coast’s sea-washed cars.
“I absolutely think dealers are going to try and sell those cars and they are going to get into the pipeline here in the Midwest,” Resenbiz said. “There are cars that are damaged or nearly totaled that are sent across one state into another all the time. A professional detailer can’t cover up a car damaged by sea water as the carpet and pad under it has to be replaced, but even more, there is all the corrosion of the electrical system and the wires that goes way beyond that level.”
Michor said he believes local dealers will be cautious about buying damaged goods and that “the exposure to having water-damaged cars in the area is negligible.”
“It’s the same thing as a few years ago with the hurricane in New Orleans,” he said. “We use Car Fax and know the vehicle’s history.”
Illinois Secretary of State Jesse White’s office is also taking action to prevent damaged cars being sold to Illinois drivers. White’s office said that as many as 250,000 cars were affected by the hurricane. Title applications are being carefully monitored to see if vehicles were registered in the flood areas, officials said.
retary of State’s office said.