How will the recent hurricanes affect the used car market?

Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, talks about how hurricane season and the wholesale market are going to impact your dealership and the used car market going into the end of the year. 

During the recession, new car sales dropped from 15 to 17 million down to 10 million. The difference was not shifted to used cars. A drop of about 2 million is expected for this year’s SAAR. Rice says we aren’t as drastic in new car sales missed opportunities as we were back during the recession.

Lotpop tracks post-hurricane listings on third-party sites. Recently from June until now used car listings on those websites haven’t changed. There isn’t a shortage of used cars in the market in what Rice is seeing for sale on the listing sites. He says what the consumers see online is about the same amount of inventory volume that’s been out there for the last few months. Not much has changed between how many cars were listed in 2019 for sale to currently how many are for sale in September of the same time frame of this year.

Each market is going to be a little different but as a whole, there’s not a shortage of used cars, but there is for new cars. After Hurricane Harvey, many used shoppers went outside their market due to inventory shortages and pricing.

Dealerships in Louisiana have to buy outside of their market areas, which means shoppers hit by Ida will likely follow the same pattern. Shoppers not affected by the hurricane aren’t willing to pay extra to buy a used vehicle. People tend to tighten their budgets going into Q4 because of the upcoming holidays.

Rice does believe the hurricanes are going to have an impact on wholesale buyers and the retail markets but not on the national scale. Continue to watch the market, adjust your stock accordingly to market shifts and keep to your 2-week sale cycle. Rice says to keep watch of the rental car companies. Rental car companies can impact the wholesale market if they decide to dump their fleets. If they decide to pivot, you’re going to want to pivot as well.

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