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November 19, 2012
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Auctions and dealers struggle to recover, as the impact of Hurricane Sandy will continue for some time. Michael Bellino, owner of New Liberty Motors in Pleasantville, N.J., sat in the eye of the storm. “We were very lucky,� he said. “Since we were directly in the eye, we didn’t get all the water pushed into us.� Bellino didn’t clear his lot because his store sat in a relatively safe zone. He did lose two vehicles to a falling tree, but that was the extent of his inventory damage. Bellino has been through many storms, but never any like this. One major intersection
nearby looked more like a beach than a street due to large amounts of sand blown in from the ocean. Business was slow when the dealership re-opened, but increased considerably within a few days, Bellino said. Many experts foresee a strong market in the area once consumers start replacing lost vehicles. Paul Frendel, executive director of the New York and New Jersey Independent Automobile Dealers Associations, said getting information from dealers has been difficult. Many are still in “crisis mode.� One Honda dealer lost 3,000 cars, she said. Auctions also scrambled to dodge and then regroup from the storm. Dianne Earley, Manheim market vice president for the Mid-Atlantic market, said the company plans ahead for these types of situations. “During Hurricane Sandy, we notified customers who conduct business at 11 Northeast locations that sales would be affected so they could plan accordingly,� Earley said. “While some areas in the Northeast region experienced significant flooding
and power outages, we are very fortunate to report that our locations experienced minimal impact. “Sales at 11 auctions were cancelled on Oct. 29 due to flooding and power outages in the area, but the majority of these locations reopened for business the next day,� she said. ADESA’s parent company, KAR Auction Services, also felt the impact of Sandy. CEO Jim Hallett addressed concerns during a recent earnings call for the company. “We did experience some delays,� he said. “We experienced reduced consignment volumes and weaker attendance. Dealers just weren’t able to get to the sales. And we experienced incremental costs.“ Hallett said the company will take a hit in some areas initially, but he also sees opportunities for next year with its Insurance Auto Auctions. The storm’s impact on used-car prices could have a benefit for auc-
%,1,0 ,2/1"06 ,# "4 & "/16 ,1,/0 I New Liberty Motors in New Jersey suffered only damage to its sign (bottom) and two cars (above). Many other dealerships and homeowners were not as lucky.
tions, Hallett said. “There’s going to be demand for used cars to replace all these vehicles that have been lost in the storm,� he said. “And it is going to
provide us an opportunity not only to sell more used cars – prices will likely increase and we will probably need to move cars in from other regions.�
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