Car sales stabilise as ‘insurance’ checks roll in

Bloomberg

As Hurricane Harvey poured on Houston, Frank Rodriguez feared for his 2014 GMC Sierra. Once he saw the pickup’s soaking-wet interior and center console full of water, he knew it was a lost cause. He just hoped his insurance company would agree and cut him a check.
Despite a dearth of inspectors in southern Texas to review the damage in person, those funds came through. The insurer took Rodriguez’s word the truck was totalled and approved his claim over the phone, he said, and about three weeks later, his truck’s lien was paid off, he had a check in hand and he was one of thousands in the region back in the market for a new vehicle.
“They gave me a really fair market value for it,” said Rodriguez,
32. “They took care of me. I
thought it was going to be a more stressful procedure.”
Drivers needing replacement vehicles in Hurricane Harvey’s aftermath could help September go down as one of the best US sales months this year. Although the annualised rate is still seen slipping compared to last year’s blistering pace, the decline is expected to be less pronounced after as many as a million autos were lost or damaged in the late summer storm—plus more in Irma and Maria that analysts say won’t show up in replacement demand for at least another month.
“When you have hundreds of thousands of people affected by an event of this magnitude,” said Edmunds analyst Jessica Caldwell, “not everyone will hit the market at once.” When automakers report monthly US vehicle sales on Tuesday, they’ll probably show an annualised pace of light-vehicle sales of 17.4 million in September, according to a Bloomberg News survey of analysts. The projected rate, which is adjusted for seasonal trends, would be down from 17.7 million a year earlier but would still mark the best pace since February.
Toyota Motor and General Motors are seen posting some the largest gains among the biggest suppliers to the US market, while Fiat Chrysler Automobiles NV and Nissan Motor could see hefty declines, according to analyst forecasts.
Honda Motor, which analysts expect to see a slight uptick in sales, has been busy in Texas as drivers quickly work to replace Harvey-damaged rides, said Ray Mikiciuk, assistant vice president of Honda sales in the US Not everyone waits even a few weeks for an insurance check, he said, since some have the means to replace a lost vehicle immediately. Honda hasn’t yet seen much of an Irma bounce, he added.
Insurance companies have been busy doing their part to return hurricane victims’ lives to normalcy fast. State Farm sent more
than 1,000 people to affected
areas, spokeswoman Rachael Risinger said.