Hurricane damage adds new pressure to an already tight used car market

The tragic destruction of Hurricanes Helene and Milton has left the Southeast with weeks, if not months, of recovery ahead. Dealers, in particular, face disruptions to inventory, rising wholesale used car prices (what dealers pay for cars at auction), and distressed consumer budgets.

What’s happening: Many dealers across North Carolina, Florida, and Georgia have reported significant inventory losses due to flooding and storm damage. 

• They’ll now have to source vehicles from other markets, tightening supply nationally.

With inventory squeezed, wholesale and retail prices are set to rise. 

• “This supply and demand imbalance, which is going to create reduced or limited availability, not only throughout the Southeast but throughout the entire country,” said Jade Terreberry, Sr. Director of Strategic Planning and Business Development for Cox Automotive.

Zoom out: Many vehicles lost in the storm were bought between 2018 and 2021, back when interest rates were 3–6%. And replacing them won’t be easy. 

• “Now that vehicle is totaled, they go to get a lifetime replacement vehicle and realize that between insurance, rates, and vehicle prices, to get that exact same car, it’s two, three, maybe $350 more per month,” Terreberry explained to CDG News.

Why it matters: With new and used inventory taking a serious hit, many affected dealers may have very little to sell right now other than service. At the same time, affordability challenges will drive more consumers to repair damaged vehicles rather than replace them — making fixed operations more crucial than ever. 

• “Fixed operations is generally the most stable revenue stream within a dealership organization. And it’s times like this disruption that dealers have to be focusing on where they can keep that stable revenue coming in,” said Terreberry.

• For dealers, this creates an opportunity to capture new service business, especially from out-of-market buyers who might have bought vehicles outside their region and are less loyal to their original dealership.

What’s next: Inventory sourcing strategies will shift as dealers tap stable markets to meet local demand, while OEMs adjust vehicle allocations to restock hurricane-hit regions.

The bottom line: The hurricanes landed at a time when the used car market is already struggling to regain its footing. The off-lease shortage, a lingering consequence of pandemic disruptions, has restricted the flow of affordable (newer) used vehicles back into the market — leaving inventories thin and wholesale prices elevated. Dealers have been hoping for some relief, but used supply recovery has been uneven, and the storms threaten to set the market back further.

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