Expect An Uptick in New Car Sales Along the Eastern Seaboard

Though it is far too early to tell what kind of lasting economic damage will be inflicted from Sandy sweeping through a massive swath of states, the auto industry can look forward to increased activity in the upcoming weeks and months.

Yesterday in the Wall Street Journal, Pete DeLongchamps, Group1 Automotive’s vice president for manufacturer relations, explained that sales will see a sustained bump for approximately 60 days as people have to purchase new cars so they can get to work. It’s one of those modern life necessities.

(If your car looks like the above, you’ll be in need of something new.)

The Journal went on to explain the old auto industry rule of thumb with cars caught in a flood: if the water level of a car in a flood reached the level of the ashtray, the car was totaled. This isn’t the case anymore, especially for new cars benefitting from cutting edge software, as the replacement costs for those parts can outweigh the cost of buying a new one.

As a result, insurance companies opt to total the car, letting the insured driver go out and buy something new.

Sandy marched through the richest and most densely populated area of the country with catastrophic storm surges, leaving photo opportunities like the scenes from New York as commonplace, and a lot of folks carless. As a result, the holiday season in the tri-state area may be very lucrative for dealerships that avoided damage or destruction on their lots.

Dealerships are typically located outside of flood zones to avoid damage to their fleets, perched high on a hill overlooking the highways or crowded roads where people turn from to buy a new vehicle. Auto groups like Group1 Automotive, with headquarters in Houston, strategically place their dealers in these high spots because they are familiar with the type of damage nature can inflict. They’re also keen to the car replacement processes from frequent experiences with hurricanes in the southern regions of the country.

Now it looks like New England may become familiar with the processes, too.