Hurricane Ian may have flooded 50,000 cars, according to a new estimate. Ian made landfall as a Category 4 storm in late September, traversing the state west to east, recharging over the warm ocean and making a second landfall in South Carolina.
Cox Automotive estimates the storm destroyed between 30,000 and 70,000 cars along the way. More accurate estimates are difficult at this point in time because insurance companies are still reporting claims. (Cox Automotive is the parent company of Kelley Blue Book.)
The news means several things for car buyers. Used car buyers must be unusually vigilant about the risk of flooded cars being put up for sale, and Floridians have to buy many replacement cars.
Flood damaged cars can be put up for sale
Flood-damaged cars can be repaired and put back into service, but this is often more expensive than it’s worth.
Totaled cars are generally given a salvage title and cannot be legally driven in the United States
Some states allow buyers to repair them and get a rebuilt title, allowing them to drive legally. Most insurance companies do not offer comprehensive insurance for a converted car, but some do offer third party insurance.
However, a fraudulent process called “title washing” can result in flood-damaged cars being put back up for sale as if they were undamaged used cars. Scammers buy damaged vehicles at auction and restore them to a condition with different title requirements and rename them. Sometimes this succeeds in blurring the paper trail of flood damage.
Since it is expensive to fully repair the car, they do cosmetic repairs to hide the damage and sell the car.
Used car buyers should know the signs of a flood damaged car.
The victims need replacement cars
Those who lost their cars in the floods need new means of transportation.
Cox Automotive estimates that at the rate of insurance payments, about two-thirds of replacement purchases will occur in October and November. After most storms, about 66% of victims who need a replacement vehicle buy a used one. However, new cars are in short supply nationwide.
See also: Florida’s insurance rates have nearly doubled in five years, but insurance companies are still losing money — and the reason is more insidious than hurricanes
This time around, Cox analysts say about 80% of replacement parts could come from the used market. This could result in a “slight increase” in the wholesale price of used cars, even as both new and used car prices begin to fall.
This story originally continued KBB.com.
