Hurricane Florence: Updates on storm’s potential impact on vehicles

SEPTEMBER 15 UPDATE: The media coverage of the rain and flooding in the Carolinas has been nothing short of heartbreaking, with many lives impacted, many homes and buildings destroyed. We’re hopeful for a quick recovery in the area, with minimal setbacks from the additional post-rain flooding forecast for this week.

Fortunately, this area of the Carolinas is less densely populated than areas struck by Hurricanes Harvey and Irma in 2017. Likewise, preparations were better and evacuation was more widespread. As a result, while property damage is likely to be significant, our estimation is that vehicle damage will be far less than witnessed during the major hurricanes of last year in Texas and Florida. Last week, we initially estimated that 20,000 to 40,000 vehicles could be lost due to flooding in the Carolinas. Our estimate has not changed.

We’ve been asked many times how this event differs from the devastating floods in Houston last year. From a business point of view, one difference is the current volume of used-car inventory. We’ve seen wholesale supplies tighten this year, and retail inventory has been moving more rapidly as a result. These are clear signs that demand continues to outpace supply. Going into last weekend, we had started to see more stabilization after values rose for the last three months, reaching an all-time record in August. Even though the replacement need will be smaller in this case, we could see values increase temporarily especially in the region due to limited supply. Hurricane Florence and its aftermath, however, will not have the notable impact on the larger U.S. vehicle market that we saw with Harvey, where an estimated 600,000 vehicles were damaged or destroyed, impacting both supply and demand.

Jonathan Smoke is chief economist for Cox Automotive and oversees the Cox Automotive Economic Industry Insights Team.

Return to this page for additional updates:  https://www.coxautoinc.com/news/hurricaneflorence

If you want more information and are a member of the media, please contact mark.schirmer@coxautoinc.com or dara.hailes@coxautoinc.com.

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The analysis below was based on the projected path of Hurricane Florence as of noon EDT on September 11.

With Hurricane Florence bearing down on east coast of the U.S., emergency preparations are thankfully well underway in North and South Carolina. The potential of significant flooding is real and property loss is a hard reality being faced by many people this week.

We’ve taken a look at the potential automotive impact and, thankfully, believe the loss in total will be manageable. While any flooded vehicle is a disaster, we expect Florence to take relatively few in comparison to other hurricanes.

Vehicles are key to any recovery, as transportation is vital. In Houston, Texas, last year, the vehicle density in the city and the nature of the flood meant a significant, sizeable loss of vehicles. Replacement vehicles were therefore hard to come by, which slowed the recovery. The sizeable Houston loss also impacted used-vehicle prices across the country, as the need outpaced the supply.

Vehicle density in current path, thankfully, is about half that of Houston. The broad possible impact path of Hurricane Florence from Savannah, Ga, to Norfolk, Va, encompasses a population of 10.2 million people and 3.9 million households. Thankfully this is not as densely populated as some coastal regions. The broad area has a population density of 182 people per square mile, which is less than half that of the Houston DMA or the state of Florida, which were impacted by Hurricanes Harvey and Irma last year.

The path area is home to 9 million vehicles in operation, with a vehicle density of 162 vehicles per square mile. By contrast the Houston DMA has 326 and Florida has 314 vehicles per square mile.

The areas that would likely see the most vehicle loss if directly hit are Raleigh, N.C.; Virginia Beach, Va.; Columbia, S.C.; Charleston, S.C.; Myrtle Beach, S.C.; Savannah, Ga.; and Fayetteville, N.C.

With North Carolina now estimated to be the direct hit, the potential impact counties are home to 3.9 million vehicles, which is 44 percent of the state’s vehicles. The impact area in North Carolina has 145 vehicles per square mile, which is lower than the state’s density of 184.

With the evacuation and other preparations taking place now, the impact should be less than what we saw in Houston last year. North Carolina could lose 20,000-40,000 vehicles if Florence maintains its current path and remains a Category 4 or 5 hurricane given the likely damage from wind and flooding.

Jonathan Smoke is chief economist for Cox Automotive and oversees the Cox Automotive Economic Industry Insights Team.

Return to this page for regular updates as Hurricane Florence moves toward land:  https://www.coxautoinc.com/news/hurricaneflorence

If you want more information and are a member of the media, please contact mark.schirmer@coxautoinc.com or dara.hailes@coxautoinc.com.