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Hurricane Harvey ruined hundreds of thousands of vehicles in and around Houston.
Here & Now's Jeremy Hobson talks with auto analyst Michelle Krebs (@MichKrebs) about what happens to those vehicles, and what used-car buyers should look for to be sure they're not being sold a storm-damaged car.
On what happens to a vehicle that gets caught in floodwaters:
"Well a lot of things can happen and we won't know till all the waters recede from Harvey but we think as many as 300,000 to 500,000 vehicles could be damaged or totally destroyed. Some will be, you know, discarded, taken to the junkyard but others — they could wind their way back to the market and that's where consumers need to be wary."
How to tell if a car has been damaged by floodwaters:
"Well the very first thing people should do is do their homework online: Find the VIN number on the car. It's usually on the side of the door, or the window and look that up in a car history report. A good thing to find out is: where were they? If it was in Houston, that should raise a red flag.
And then sometimes the titles say that it's a flood car or a salvage car. However, that's not a guarantee because sometimes there's a lag time in getting that designation. Beyond that, you really have to use all of your senses to inspect the car. Does it smell musty? Is there mud residue or what looks like water damage or corrosion underneath the vehicle or on the brakes and shocks? Touch the ceiling of the car see if it feels like it's been damp or if it's drooping a bit. And then if you're still concerned, I would take it to an independent mechanic or there are independent inspecting firms — they will, for a fairly minimal fee, inspect the car to make sure it's OK."
How insurance comes into play:
"Some cars were uninsured, and some did not have comprehensive insurance that would have covered that. Insurance won't cover all of them."
On how people can get around Houston after the hurricane:
"Houston is a very car centric city. People really depend on their cars there and of course, we expect that that'll be one of the first issues they address because they want to get their life back to normal. They want to get back to work. So we already are seeing on our web sites traffic and applications for financing of a new car — soar. And automakers are offering some special deals for people who were affected by the floods. So the issue is going to be getting inventory there. But we are seeing auto makers and dealers, dealership groups, start moving their inventories around from other parts of the country. And there's plenty of it that they'll bring to Houston."
This article was originally published on September 08, 2017.
This segment aired on September 8, 2017.
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