Flooded Cars 01Enlarge Photo
UPDATE: See below
The effects of Hurricane Sandy are far bigger than many imagined. The storm reshaped communities, and some will argue that it changed the outcome of yesterday's election.
Sandy will also have a small but important impact on used-car values. As proof, the National Automobile Dealers Association points to Hurricane Katrina, which destroyed hundreds of thousands of vehicles along the Gulf Coast -- vehicles that subsequently had to be replaced. That simultaneous loss of supply and growth in demand led to a 3% rise in used car prices after Katrina made landfall in August 2005.
Sandy was a different storm, and as such, it had a different impact. And although the total damage wrought by Sandy won't equal that of Katrina, NADA expects used vehicle values to climb slightly for the next few months -- especially in the Northeast, where Sandy made landfall.
That's notable because used-car values are already sky high, particularly for fuel-efficient models. Whether insurance companies will take those factors into account when issuing settlements remains to be seen.
Unfortunately, disputing such discrepancies is difficult, and the appeals process varies from provider to provider. You have far more control, however, over the replacement vehicle you select. And if you're looking for a used vehicle in the next few months, we encourage you to be very careful.
Update: Carfax now offers a free search tool for used-car buyers at flood.carfax.com. Just enter the VIN of your prospective purchase, and Carfax will tell you if it was ever reported as flood-damaged. The data isn't restricted to Hurricane Sandy: any car with with flood damage on its record should be listed.