We have some more bad news for the Houstonians.
The jaw-dropping destruction wrought by Hurricane Harvey that swept through Texas could well be the costliest natural calamity witnessed by the US in recent past. Even as the authorities take stock of the extent of damage brought on by the unprecedented flooding, it has emerged that nearly 1 million cars may have been destroyed in the catastrophe. Industry experts believe that this could change the face of the used auto market industry in the country.
Analysts are already working on drawing up estimates of the number of vehicles damaged by the torrential rains and consequent flooding, and the emerging picture does not look good. According to experts from Evercore ISI, more than 1 out of 7 cars in Houston are likely to have been rendered unrecoverable or beyond repair. The USA Today quoted an economist associated with Cox Automotive as saying that the number of people who have lost their vehicles could be anywhere between 300,000 and 500,000.
If you also add the number of vehicles lost by business establishments operating the area to the mix, the figure could well be nearing – or even crossing – the 1 million mark. These figures have already triggered speculations about a rise in the prices of used cars, not just in the Harvey-impacted areas but across the US.
These damaged cars will create a need for more cars in Houston, which could consequently reverse the trend of decrease in prices of used cars as well as depreciation in value of new ones. A 17 percent dip in the average price of used cars was recorded over the past one year. This depreciation in value was attributed to an oversupply caused by an increase in new car sales.
As the roads of Houston turn into floating graveyards for its vehicles, a fairly large number of residents will have to buy new ones, as it is a spread out city where personal vehicles are the preferred mode of transport. With Houstonians turning into a whole new segment of buyers unto themselves, there is bound to be a spate in prices.
