Used car shopping disasters can be horrifying, which is why CARFAX is such an important tool in your used car shopping experience. Natural disasters, on the other hand, are of a whole other magnitude. Every year, they’re responsible for destroying homes, businesses and landscapes, not to mention tragic losses of life. According to NOAA (National Oceanic and Atmospheric Administration), 2017 was marked by 16 weather and climate disasters across the United States, including drought, flooding, wildfires, tornadoes, hurricanes and freezing. Losses are estimated at more than $300 billion, a number expected to increase as reconstruction and recovery efforts continue.
Among the damages are hundreds of thousands of automobiles destroyed by fire, water, wind and landslides. Hurricane Harvey, for example, may be responsible for as many as 500,000 storm-related automotive claims in Texas alone.
Anyone shopping for a used car after a banner year of natural disasters will find themselves in quite a predicament, whether it’s the rising price of used cars or the salvage and unscrupulous resale of totaled vehicles.
Natural Disasters Affect Used Car Prices
Used car values can vary widely, depending on year, make, model, mileage, condition, location and history. Rarity also plays a part in used car pricing, which is why a Lexus LS sells for far less than Ford GT, for example. Natural disasters, though, tip the balance, destroying new cars and used ones, making all cars a little rarer, and the laws of supply and demand come into play.
Before a natural disaster, with demand for used cars constant, pricing could be considered constant. After a natural disaster, however, demand suddenly rises and supply suddenly falls, resulting in a spike in used car prices. Used car shoppers can expect higher prices, not only in the disaster area, but across the country.
After natural disasters, you can protect yourself from high used car prices by expanding your search to include vehicles outside your state. Don’t forget to order an independent used car inspection and CARFAX report. Used car shoppers might also consider new cars, as dealers may offer attractive pricing and financing. New cars might be had for pricing comparable with some used cars.
Natural Disasters and Salvage Titles
Unfortunately for hundreds of thousands of survivors, their vehicles simply cannot be repaired, and the insurance company will “total” the vehicle, at which point their titles are branded “scrap” or “salvage.” Insurance payouts help owners move on, but the life of a totaled vehicle doesn’t end at the scrapyard. Usable parts can be used to repair other vehicles, such as engines, transmissions, wheels, tires, axles, doors and windows. Additionally, salvage vehicles can be bought and rebuilt, wherein lies a problem that could get used car buyers into expensive trouble.
When a vehicle is totaled, it is marked as salvage or scrap, but only in the state in which it’s titled. Some states are stricter than others, but it doesn’t take much for a shady reseller to simply transfer and retitle the car in a lenient state, “washing” the title of its salvage or scrap status. In the case of flood cars, a proper rebuild might include a total teardown of the engine and transmission, new computers, and extensive interior and exterior cleaning, which could cost thousands in parts and labor, possibly more than the value of the vehicle itself.
After title washing, though, an unscrupulous used car seller might simply detail the car and sell it to an unsuspecting buyer. Hidden damage could cost the new owner thousands in electrical problems, computer problems, corrosion and rot, and mold remediation. By the time the owner discovers the problem, the seller is long gone.
True, one might purposely buy a salvage vehicle to rebuild it, but you can protect yourself from not only a disaster car, but a financial disaster, too. Whether the vehicle is local — or from across the state or the country — order an independent used car inspection and a CARFAX Report.
Ask for CARFAX
Buying a used car after a disaster could indeed cost you more, whether it’s simply supply and demand, forcing the price of available vehicles higher, or unexpected repair costs associated with buying into the unknown. In either case, make sure you’re getting what you’re paying for: keep your eyes open, get an independent used car inspection and order a CARFAX report. Each CARFAX Vehicle History Report includes information on past vehicle registration, past title status, odometer readings, maintenance records, recall information, vehicle usage and more.