In the aftermath of Hurricanes Harvey and Irma, consumers are most likely to shop for a used vehicle, but they might look to buy new as used prices have been rising recently, according to Kelley Blue Book. Some automakers are offering up to $1,000 in hurricane relief incentives.
U.S. demand continues to shift toward SUVs, but in the hurricane impacted areas, consumers might look to shop for cars more because they are the most affordable and more plentiful in supply.
“While major hurricanes devastated parts of Texas and Florida in the past month, this is driving replacement demand for those drivers with vehicles destroyed,” said Tim Fleming, analyst for Kelley Blue Book. “This demand has already started in some areas, but will continue into October and potentially November, as vehicle insurance payouts are received.”
Wholesale used vehicle prices rose 0.75% in August, from July, according to the Manheim Used Vehicle Value Index. The prices rose 3.4% in August, from the same month in 2016. In August, the seasonally adjusted annual rate of sales for used cars declined 5% to 38.1 million vehicles, from 40.1 million in July. Through the first eight months of the year, sales are up 1.2% and are expected to rise to 3% by the end of the year, “supported by replacement demand in southeast Texas.”