Ted Smith has a unique automotive industry perspective. As president of the Florida Automobile Dealers Association, he oversees about 850 dealerships, many of which endured Hurricane Ian without substantial damage.
But for more than 20 years, Smith has cultivated his expertise in understanding the dealers’ customers. He knows they suffered greatly. Thousands of vehicles were damaged or completely totaled during the devastation, and the owners of those vehicles have purchased or will need to purchase replacement new or used cars or trucks.
“We haven’t had a great amount of damage to vehicles, at least not vehicles in the possession of dealerships,” says Smith of the more than 100-year-old FADA, a trade organization based in Tallahassee. “But obviously people at home and in businesses lost vehicles, either in flooding or winds, and they are just going to be in the open market.”
According to Florida-based Mark Friedlander of the Insurance Information Institute, Hurricane Ian was the second-largest natural disaster vehicle loss event on record in the U.S. About 500,000 vehicles were destroyed when Hurricane Harvey swept through Texas and Louisiana in 2017. About 350,000 vehicles were damaged or destroyed in Hurricane Ian.
Several automakers have offered consumer assistance. The Disaster Relief Bonus Cash Program, provided by GM in eight Florida counties including Charlotte, Collier and Lee, offers a $1,000 incentive to owners of damaged cars or trucks toward the purchase of a 2022 and 2023 model Buick, Cadillac, Chevy or GMC. A $500 incentive is available for customers leasing GM vehicles. Mazda Financial Services is offering extensions and lease deferred payments, redirecting billing statements and arranging phone or online payments.
As has occurred several times previously during Smith’s tenure, hurricanes have greatly affected the Florida automotive industry—which yearly provides about 16% of the state’s tax revenue, according to the Michigan-based Center of Automotive Research.
Dealerships suffered extensive damage in Hurricane Charley (2004) and Michael (2018); Southwest Florida dealerships and car rental agencies learned from the past and moved vehicles to higher ground as Hurricane Ian swept across the state. The foresight provided a positive from a tragedy. Smith said dealerships don’t have a large new inventory, but used vehicles are more readily available—although still also limited by the ongoing supply chain shortage.
“The inventory is very, very low,” says Andrew Le Sueur, sales manager of Germain Honda in Naples. “With so many cars totaled, people are buying whatever they can get their hands on.”
Germain sells several manufacturers’ vehicles in numerous locations in Southwest Florida.
“With the supply so low and the demand so high, it’s creating a tough situation for a lot of people,” says Le Sueur. “We can’t get new cars or pre-owned cars fast enough.”
A better option for buyers is the increasing availability of car auctions online.
“It can really be a helpful thing for dealers and for people who come in and say, ‘I need a car today,’” says Smith. “I would say the best thing people can do is go to a franchised new car dealership. It may be a limited inventory of new vehicles and a reasonably good inventory of used vehicles. And if not, they will be able to assist the person in finding something online to meet their needs.”
Supply and intensified demand definitely affect consumer prices, notably in the automotive industry. “I have dealers that have made a commitment to sell at MSRP (manufacturer suggested retail price), and I have dealers who are not making that commitment for one reason or another,” Smith says. “They are selling the vehicles at whatever the market will allow.”
Hurricane Ian brought another automotive danger to the forefront: the spontaneous combustion of electric vehicles whose batteries have been damaged by saltwater.
The National Highway Traffic Safety Administration has long warned of EV fire dangers, detailing the susceptibility of lithium-ion batteries to catch fire when damaged by saltwater. The federal agency, which oversees the country’s transportation safety, states that flooded electric vehicles should be at least 50 feet away from vehicles or anything easily flammable.
About two weeks after the disaster, Florida State Fire Marshal Jim Patronis scolded the major EV manufacturers for not equipping their vehicles with safeguards against spontaneous combustion.
In a letter to more than 30 EV carmakers, including Ford, General Motors, Rivian and Tesla, Patronis asked the companies to “step up, demonstrate leadership and partner with the State of Florida and local officials in this recovery.”
Patronis reported on social media that a home on Sanibel Island was severely damaged after the Tesla in the garage caught fire from the storm.
Florida has just fewer than 60,000 registered electric vehicles, the second most of any state in the country behind California. According to the Southern Alliance for Clean Energy, 3% of the cars sold in Florida in 2021 were EVs.
“The unfortunate reality is that there is a population of vehicles that could spontaneously combust, putting our first responders at risk, and the manufacturers are nowhere to be found,” the fire marshal wrote. “For as big a risk as this is to fire teams, for companies who have received an immense sum of subsidies from taxpayers, I would have hoped the reaction by manufacturers would have been more robust.”
Buyer be wary
The number already was staggering, and then it quickly nearly doubled in the chaos of Hurricane Ian. CARFAX, the company known for its vehicle history information, reports the country now has more than 750,000 water-damaged vehicles.
About 400,000 water-damaged vehicles already were on the road before the devastation in Florida and the Carolinas. Some of the owners are unknowing scam victims. The potential for the same wrongdoing is now further prevalent.
Cars can be sold in Florida with water damage if the seller informs the buyer and the vehicle receives a “salvage title.” But disclosure doesn’t always occur. Damaged vehicles often are taken out of state where vehicle identification numbers, or VINs, can be switched.
A vehicle damaged by water may appear cosmetically sound, but it could be “literally rotting from the inside out,” says Emilie Voss of CARFAX. “If you don’t know what to look for, it’s nearly impossible to tell.”
Floodwater can cause mechanical, electrical and health and safety issues in a vehicle. According to the Missouri-based data company, Texas and Florida continue to lead the nation in the dubious honor of the most flood-damaged cars on the road. “We are seeing these flooded cars show up all around the country, putting unsuspecting buyers at risk,” says Voss.
CARFAX has a multi-point list for consumers to follow when checking a vehicle for flood damage.
• A musty interior odor that sellers sometimes try to cover with a strong air freshener
• Loose, new, stained, damp or non-matching upholstery or carpeting
• Rust around doors, under the dash, on pedals or inside the hood and trunk latches
• Mud or silt in the glove compartment or under the seats
• Brittle wires under the dashboard
• Fog or moisture beads in the interior or exterior lights or instrument panel
The National Insurance Crime Bureau offers a free, searchable VIN database at nicb.org.