As dealer groups and industry analysts survey the damage of Hurricane Sandy to the used-car industry, most seem to agree on one thing: the storm will push used-vehicle prices up in the coming months.

Edmunds.com director of analysis Ray Zhou, commented on this trend late last week, saying “Used vehicle prices will increase $700 to $1,000 in the impacted area short term due to the damages done to dealer inventories and supply chains (trade-ins and local auctions).”

But he offered a caveat, as well:“This increase should be short term and price should not be dramatically higher for two reasons: (1) dealers can get needed supply from far way (non-affected area) fairly quickly nowadays, and (2) insurance companies are going to pay more for the damaged/destroyed vehicle than a dealer would on a trade. Additionally, some of the new incentives for new vehicles in the impacted region may attract some of the used buyers to the new market,” Zhou said.

Earlier last week, Black Book’s Ricky Beggs offered Auto Remarketing some similar insight into how the storm may affect the used-car market in the coming months.

The Black Book managing editor stressed that used-car inventory may become even tighter for dealers in an already difficult environment.

“There is going to be a quick influx of demand for additional used cars, especially all the way up the East Coast, and will reach up to New England and down South,” Beggs said. “People are going to need to replace damaged vehicles … I think we will see a little bit of a price bump in the market; I expect prices to definitely be impacted,” Beggs said.

Group 1 Assesses Damages

Also reporting on the effects of Hurricane Sandy last week was Group 1 Automotive.

The company announced details as it assessed damage at 24 of its East Coast dealerships in the aftermath of the storm, which represented 19.4 percent of Group 1's new vehicle unit sales in the third quarter and are located in New Jersey, New York, Maryland, New Hampshire and Massachusetts.

The dealer group explained the preliminary assessments indicate minor water damage at some facilities and the loss of a number of new and used vehicles due to flooding and falling debris.

"Our primary concern is for the well-being of our employees and customers, as well as all the individuals that have been impacted by the devastation in the Northeast," said Earl Hesterberg, Group 1's president and chief executive officer.

"We are working to quickly assess and repair the damage at our dealerships in order to restore full operations for the local residents. The largest hurdle at present is restoration of power and computer access at a number of the dealerships and the clearing of local roads,” he continued.

The company is insured and estimates it will incur a $250,000 pre-tax deductible charge for the facilities' damages in the fourth quarter, as well as inventory losses that are estimated to be about $2.0 million based on preliminary assessments, according to officials.

And how long will dealership doors remained closed?

“Business interruptions range from a couple of days in Group 1's Boston-area stores to potentially two weeks in the hardest hit areas of Long Island, N.Y., and northern New Jersey,” officials said.

Toyota Suffers Storm the Worst in New Jersey Area

Also reporting on damage from the storm was Toyota, who explained it continues assess the damage caused by Hurricane Sandy to its operations on the East Coast.

Officials said the storm had the biggest impact on company operations and dealerships in the New Jersey area.

And some regional/branch offices, as well as Toyota, Lexus and Scion dealerships, were affected by flooding and power outages.

A corporate office was damaged, as well.

Toyota Logistics Services operations at the Port of Newark in New Jersey, sustained water damage to its buildings and a number of vehicles, officials said.

The company reported no known injuries to associates, family members and dealer employees.

Sandy Severely Damages Penske’s New Jersey Operations

But it seems some fared worst than others. Penske Automotive Group chairman Roger Penske used part of Friday morning’s conference call the company conducted to share its third-quarter performance to give some personal testimony about the damage he saw first-hand from Superstorm Sandy.

Penske noted the group’s stores in Connecticut, New Jersey, New York, Rhode Island and the Washington, D.C. area lost a minimum of three to four days of business last week. Those areas contain 56 Penske dealerships with nearly half of that amount in New Jersey. The company indicated those operations represented approximately 17 percent of its retail unit volume and revenue for the third quarter.

Some of the hardest hit Penske dealerships are in Jersey City, N.J. Penske said his Toyota, Nissan and Chrysler dealerships suffered “severe” flooding as up to four feet of water inundated showrooms and service shops, resulting in damage to more than 750 vehicles.

“I think the good news is all of our employees are safe,” Penske said.

As of Friday, electricity had not been restored to the Jersey City stores so the Penske team brought in generators and fuel from as far away as Pennsylvania to help personnel clean up and assess damage.

“Collectively we’re using our best efforts to get each store back online and operational. However, our first priority rests with the personal well-being of our employees and their families. While many have suffered personal losses, their efforts in preparing for the storm and responding to the damage have been outstanding,” Penske said.

Although he made the trek to New Jersey last Wednesday to “provide some moral support for our team,” Penske said it was difficult to pin down exactly how much damage the group suffered as the result of Sandy at this juncture.

“We would expect to incur charges for insurance deductibles on the loss of inventory and for the property damages during the fourth quarter,” Penske said.