I’ll huff and I’ll puff, and I’ll blow your dealership down! This is no fairytale for the nation and its automotive dealerships. As usual, the season began promptly in June with one of the first major storms on June 25th in Michigan. The Jefferson North Assembly Plant was hit hard, losing 25 vehicles, with an average cost of $40,000, tallying to around $1,000,000 in unsalvageable vehicles. This only adds to the automotive inventory shortage the country is experiencing due to the chip shortage and spike in used car prices across the nation. And we’re talking about only one account of loss, in one town. According to the National Oceanic Atmospheric Administration (NOAA), we will have a busier than usual hurricane season with 13-25 named storms. Take cover, we aren’t anywhere near the end of this storm season. As this article goes to press, hurricanes, hail storms and tornadoes causing floods are alive and well in America.

On July 30th, a tornado ripped through Bensalem, PA and demolished a sizable chunk of a dealership (as seen in the photo above). This is just another incident in a long list that may well continue, even though peak tornado season has passed. In addition to significant personal and business losses from the hurricanes, tornadoes and floods, the retail automotive industry is particularly susceptible to significant inventory damage as a result of the weather.

As it should be, a Faulkner Automotive dealer representative made this statement; “Our first priority is tending to our employees and our customers to ensure their safety and well-being. . .”

Beyond the critical human component to protect employees, the dealer principals are faced with hundreds of thousands or millions of dollars in flooded vehicles. According to a recent article in Auto Influence, ‘ Water damage is one of the most serious issues your vehicle can come across, and it’s rare that these vehicles overcome this damage. ‘ And while lot insurance is apt to cover a large portion of the losses, cash flow interruption, loss of immediate access to inventory and numerous hassles involved with claims and replacing vehicles can paralyze some dealerships, especially the smaller independents.

Upside Amid the Storms for Independent Used Car Dealers

According to CNN, the great American car shortage won’t be over for months. This news hardly comes as a surprise given the devastating weather patterns throughout much of the nation. The losses to independent auto dealers and franchise dealers alike, throw a wrench in the thriving used car market. Just as used car pricing had begun to level out, the storm surges of late (and those expected to come) exacerbate market conditions. As some dealerships are hit with inventory loss due to weather, this impacts supply across the industry, which may prove to be a positive for those independents not affected by a loss of inventory or business continuity. The lucky dealerships that escape the weather will be able to serve customers with business as usual.

Since mother nature will continue to be a very real factor that impacts business, the best we can do as dealers is to be prepared. Auto Success Online suggests some of the basics for any inclement weather:

For even more comprehensive preparedness protocols, visit www.weather.gov to learn how you can ensure your family, your team, and your customers stay safe and are prepared for severe weather of all kinds.

Automatic is a leading automotive fintech platform serving independent dealers by providing fast, automated, secure and transparent finance solutions, enabling your customers to enjoy their vehicle more quickly with a seamless customer journey. Learn more at https://www.automaticusa.com/