Will price of cars rise due to Harvey floods in Houston?

[Rob Base 2.0]

All those cars ruined in Houston because of hurricane Harvey....

Do you think it will cause car prices to rise? (at least temporarily?)

[Tennesseer]

Not sure prices will rise but all the remaining 2017 vehicles in sales lots will be snatched up pretty quickly and making plenty of room for the 2018 models.

I wonder if Carfax will be busy with inquiries about vehicles sold by some shady used car lots which might have been caught up in the flooding.

[tskeeter]

Both new and used car prices will probably jump in the shorter term due to increased demand.  Longer term, when the storm damaged cars hit the market, the increase in supply of used cars will caused used car prices to decline.

[hoops902]

Sept 5, 2017 23:14:25 GMT -5 tskeeter said:

Both new and used car prices will probably jump in the shorter term due to increased demand.  Longer term, when the storm damaged cars hit the market, the increase in supply of used cars will caused used car prices to decline.

Do you think there's a heavy demand for cars that have been in a flood? It's hard for me to imagine that driving demand, just like I don't expect real estate being abandoned to drive down prices due to demand...nobody wants a ruined house/car enough to impact the economics of it.

[bean29]

Sept 6, 2017 14:50:26 GMT -5 hoops902 said:

Sept 5, 2017 23:14:25 GMT -5 tskeeter said:

Both new and used car prices will probably jump in the shorter term due to increased demand.  Longer term, when the storm damaged cars hit the market, the increase in supply of used cars will caused used car prices to decline.

Do you think there's a heavy demand for cars that have been in a flood? It's hard for me to imagine that driving demand, just like I don't expect real estate being abandoned to drive down prices due to demand...nobody wants a ruined house/car enough to impact the economics of it.

I think the point is that people will avoid buying any used car, for fear that it may have been flood damaged and the evidence "concealed".

[hoops902]

Sept 6, 2017 15:34:18 GMT -5 bean29 said:

Sept 6, 2017 14:50:26 GMT -5 hoops902 said:

Do you think there's a heavy demand for cars that have been in a flood? It's hard for me to imagine that driving demand, just like I don't expect real estate being abandoned to drive down prices due to demand...nobody wants a ruined house/car enough to impact the economics of it.

I think the point is that people will avoid buying any used car, for fear that it may have been flood damaged and the evidence "concealed".

That may be true, but that's not what the post I responded to indicated.  The post I was responding to was specifically talking about a higher supply, not lower demand.

I'm not sure that people in non-Houston areas will really avoid buying used cars though to cause some nationwide change in used car prices. 

[Deleted]

Sept 6, 2017 14:50:26 GMT -5 hoops902 said:

Sept 5, 2017 23:14:25 GMT -5 tskeeter said:

Both new and used car prices will probably jump in the shorter term due to increased demand.  Longer term, when the storm damaged cars hit the market, the increase in supply of used cars will caused used car prices to decline.

Do you think there's a heavy demand for cars that have been in a flood? It's hard for me to imagine that driving demand, just like I don't expect real estate being abandoned to drive down prices due to demand...nobody wants a ruined house/car enough to impact the economics of it.

Ironically, yes.  Everything is about price.  I work with a guy and his father's recent car purchase include 1 that had been in a major accident, poorly repaired and a flood car.  The flood car has all the problems you would expect, but he is still happy with the deal he got and doesn't care what dash lights come on/off or much about the "performance" of the car.

Some people only need vehicles for very specific purposes and overall reliability/safety isn't an issue.  All the trucks will find homes.  Farmers up here always want something that is already headed to the junk pile as they just beat them up horribly on the farm.  They typically can "repair" them themselves and most of that is just removing the problematic part.  You don't need AC/radio/mirrors/movable seats/etc. for these farm trucks.

[tskeeter]

Sept 6, 2017 14:50:26 GMT -5 hoops902 said:

Sept 5, 2017 23:14:25 GMT -5 tskeeter said:

Both new and used car prices will probably jump in the shorter term due to increased demand.  Longer term, when the storm damaged cars hit the market, the increase in supply of used cars will caused used car prices to decline.

Do you think there's a heavy demand for cars that have been in a flood? It's hard for me to imagine that driving demand, just like I don't expect real estate being abandoned to drive down prices due to demand...nobody wants a ruined house/car enough to impact the economics of it.

Let me elaborate.  

Cars damaged by flooding will have to be replaced.  Some will be replaced with new cars.  Increasing the demand for new cars above normal levels in the near future. Others will be replaced with used cars, increasing the demand for used cars above normal levels in the near future.

Longer term, flood damaged cars will make their way into used car markets.  This will increase the number of used car available for sale.  People will try to avoid purchasing the flood damaged cars, but they will be difficult for buyers to identify.  Some of the flood damaged cars may be shipped out of the country for sale.  This will decrease the number of used cars that were not subject to flood damage that are shipped out of the country.  As a result, it's very likely that the total number of used cars for sale will be higher in 12 months than the number that are for sale today.  When you couple the increased supply of used cars with the probability the flood damaged cars will be sold a bargain basement prices, it is quite likely that used car prices will decline.