Car dealerships struggle with losses after Sandy

November 29, 2012 8:06:35 PM PST
It's slow going for dealerships. They lost tens of thousands of cars, all flooded out from Sandy.

One dealership in Jersey City took a loss of $25 million dollars.

The vast parking lot behind Hudson Toyota in Jersey City holds a thousand brand new and used cars, and when Sandy came ashore, it was very nearly full and four feet deep in water.

"It came from both sides," Miller said.

Bob Miller runs several Penske car dealerships and he says the company lost $25 million in inventory that day.

"There were a thousand new and used vehicles between the three lots, we sit on about 24 acres of land, so there were 992 of them that were total losses," Miller said.

$25 million in new and used cars so soaked, they're still leaking water a month later.

They are all being towed, and, by the truckload, carted away to be crushed and sold for scrap.

They are really just a fraction of the 400,000 cars totaled in the storm. Ralph Mendez lost two of them.

So Mendez was out shopping today, on a budget.

"With all the damage I can't spend a lot of money on a car, I don't want to go into debt so I have to keep the car payments down," Mendez said.

Manufacturers are offering $500 or $1,000 incentives for people buying new cars, and dealers are looking to make up for the days they had to close after the storm, so there are deals to be made there.

But the used car market will be a lot more difficult because there are fewer of them.

"There's going to be a shortage of used cars in the market place too and additionally when the customer comes in on a new vehicle purchase they don't have a trade in because it was flooded," Miller said.

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