When Superstorm Sandy smashed into the metro New York coastline two weeks ago, the winds and waves ravaged everything in their path, from homes on Staten Island to the roller coaster on the Seaside Heights, N.J., boardwalk.
Also caught up in the deluge were tens, and perhaps hundreds of thousands of automobiles. Some came floating out of flooded Manhattan garages. The roofs of others could barely be seen submerged at the shipping port near Newark. Still more were tossed and rolled in communities like Atlantic City, Breezy Point and Sea Bright, wrapped up amid the wreckage of homes, boats and businesses.
Just how many vehicles were caught up in the disaster remains to be seen, and the tally could take months to complete. It could add billions to the total damages from what is expected to become one of the most expensive storms ever to strike the United States – but experts are already debating whether Sandy’s automotive toll will come anywhere near what was seen in other recent disasters, such Hurricane Katrina in 2005.
A preliminary estimate by the National Automobile Dealers Association suggests the tally could reach 250,000 vehicles, well under the 600,000 experts say were claimed by Katrina. But preliminary data suggest the damage may be far less than initially feared – an early review of data by the Associated Press finding just 31,000 claims filed with four major insurance companies serving the New York region as of late last week.
"It's not anything near what we're talking about in the Katrina situation," James Appleton, president of the New Jersey Coalition of Automotive Retailers, told AP.
The Coalition represents about 500 N.J. dealers, but there are more than 1,500 showrooms in the NY tri-state region. And the shipping center near Newark, including Port Elizabeth, are the busiest for auto manufacturers on the East Coast.
“We had nearly 5,000 cars at Port Elizabeth, N.J., and a little over 1,000 more cars in dealer stock up and down the East Coast that are unsaleable and must be destroyed,” said Dave Reuter, chief U.S. spokesman for Nissan. “Obviously there are customer cars that were damaged, too, but it will take time to determine how many.”
More than a dozen Fisker Karma plug-in hybrids and at least one Toyota Prius hybrid caught fire during the flooding, a problem now believed to have been caused by saltwater shorting out the vehicles’ batteries. Fisker reports about 320 of its new model were lost due to the flooding, all told, at Port Elizabeth. Meanwhile, another 4,000 Toyota and Lexus models were also at the shipping center just outside Newark, waiting for delivery to dealers. All told, an estimated 14,000 new vehicles were lost at New York area ports.
Automakers are expected to scrap most or all of those vehicles to avoid facing problems later should they develop unexpected flood-related problems. Industry officials warn that while it’s possible to dry out a car, any vehicle whose engine and other key mechanical components were submerged will likely experience issues later on, whether premature corrosion, faulty electrical and electronic systems or simply musty smells and mold that can’t be contained.
The concern is that dealers and consumers, especially those whose losses aren't covered by insurance, may try to repair their vehicles and push them back into the market.
“A car that’s been in a flood, with the engine submerged for any length of time, will never be the same,” said Carl Sullivan, who has nearly two decades of experience inspecting vehicles for AiM, a California-based team of auto inspectors.
So far, insurance companies are logging far fewer claims than at the same point after Katrina, according to the National Insurance Crime Bureau, which tracks insurance related crimes including the resale of vehicles that insurance companies write off after storms.
But experts caution that it could be weeks, even months before the full extent of the damage is known – in many cases because automotive retailers and vehicle owners are still struggling with more serious issues, such as the destruction of their businesses or homes. Along many parts of the affected coastline, it’s quite possible that every homeowner who choose to sit out the storm only to experience a flooded or wind-damaged home had one or more vehicle impacted, as well.
Experts like AiM's Sullivan warn that the problem could eventually impact used car buyers far from the storm’s reach. They note that scam artists will take junked vehicles, make minimal repairs and then move them around the country, registering and re-registering them in states where notations like “Junked” or “Flooded” wash off their titles.
Sullivan said it can be difficult to detect a flood-damaged vehicle; he once found out only by discovering a couple dead fish hidden under a seat. But he suggested several key steps, such as:
Looking for water or condensation in headlights or taillights;
- Mud in seat belt latches or seat tracks.
- Water in the trunk.
- Corrosion in unusual places, such as atop the shock towers.
- A musty smell or mold.
Buyers may also be impacted if, in fact, the number of vehicles destroyed by Sandy does prove to meet worst-case forecasts. Used car prices have been running at or near record levels in recent months. That is, in large part, due to the low sales of new vehicles during the recession which led to a shortage of relatively new, “previously owned” vehicles.
A burst of demand in the coming months could mean “We may be seeing anything from $200 to $600” in higher prices for good-quality used vehicles, “depending on how much the need is,” cautioned Ricky Beggs, managing editor of the Black Book, which tracks vehicle pricing.
He anticipates particularly strong demand for pickups and vans, in the months to come, as contractors not only replace damaged vehicles but add to their fleets in order to take on the mammoth task of helping rebuild much of the mid-Atlantic coast.