The used-vehicle industry appears to be in better position to welcome extra demand stemming from destroyed units strewn within the path of Hurricane Harvey.
But can individuals who lost so much in Houston and elsewhere in the Gulf region handle the potential extra cost of securing new transportation? That’s what experts are now considering.
During a conference call with the media on Friday, Autotrader executive analyst Michelle Krebs said, “Affordability is going to be an issue. These poor people are going to be challenged financially if they’ve lost homes and don’t have insurance and they’ve also lost their car. That’s something we’ll have to watch carefully.”
Krebs mentioned that while there are plenty of off-lease units in the wholesale space — nearly new units less than 4 years old — she pointed out that vehicles that are 4 to 8 years old and are “much affordable are in much tighter supply.”
Cox Automotive chief economist Jonathan Smoke quantified Krebs’ point with some specific figures, stating during the same call that there are roughly 20 million less units that are between 4 and 8 years old than those nearly new, off-lease vehicles.