How will it impact nationwide auto sales?
The full extent of the devastation, mayhem, pain, and loss of life that Hurricane Harvey is leaving in its path is still unknown, and people are still trying to get to safety. It sent the oil-and-gas industry reeling. Housing in affected areas took a serious hit; perhaps $40-billion in damage, according to an early guess by CoreLogic.
Fannie Mae and Freddie Mac expect losses on about 400,000 mortgages that they guarantee. This could increase as flood waters rise. They won’t know the extent of the damage until after the wind and rain in Texas and Louisiana subside. Other homes did not have mortgages, or had mortgages that were not guaranteed. So perhaps a total of 500,000 homes.
If each affected home had 1.6 vehicles parked there on average, it would mean that about 800,000 vehicles sustained flood damage. Many people evacuated with their cars, so this is just a guess. How big is this number? Over the past 12 months in the Greater Houston Area, dealers sold 285,000 new vehicles.
But not all flood vehicles will need to be replaced. Insurers might only pay to clean up and repair some of the vehicles. And many people without comprehensive coverage won’t have the money to replace their vehicle. They might also get laid off because the company they work for is under water, and it might take a long time for things to return to normal.
When a new vehicle on a dealer lot gets flooded, it cannot be sold anymore, and the insurance company takes it off the dealer’s hands. But personally owned flood vehicles that were partially immersed in water might be serviceable afterwards, though they tend to stink, are hard to clean up, and may have, let’s say, some issues. If a vehicle gets washed down the street and suffers severe body damage, it’s likely to turn into a total loss.
The driver of the SUV in this photo apparently “tried to make a right turn into a gas station last night; a ditch full of water looks a lot like a road full of water in the dark,” said Michael Gorback, M.D., in Houston, who took the photo. This looks like one of the headaches the insurance industry is facing:
So if 800,000 cars received flood damage, not all will be replaced. And of those that will be replaced, many were older vehicles that will be replaced by used vehicles. But how many of them will be replaced by new vehicles? And what will this do to the decline so far this year in new vehicle sales? Will it stop Carmageddon and restart the auto boom?
Before Harvey hit, auto sales in Greater Houston had already been battered to Financial-Crisis levels by the oil bust and the subsequent construction downturn. In July, heavy incentives finally did the trick, and there was an uptick: new vehicle sales rose 6.4% from the crushed levels a year earlier, according to TexAuto Facts, reported by InfoNation, and cited by the Greater Houston Partnership.
But for the 12-month period through July, auto dealers sold 285,501 new vehicles, down 12.4% from the same period last year, and down 25% from the levels in late 2015 and early 2016 (chart by the Greater Houston Partnership, red marks added):
Now come the effects of Harvey.
August: Starting on Friday, August 25, in the flooded areas, new vehicle sales essentially dropped to zero. Dealerships are closed. People are struggling with evacuations. They’re trying to find loved ones. They can’t get around. Auto sales will remain at zero in flooded areas until the water recedes.
This may take a week or more. So auto sales in the affected areas, which now include parts of Louisiana, will plunge in August. The above chart will take a very ugly turn. Given how large the area is, six days of zero sales will further depress nationwide sales numbers for August.
September: Vehicle sales in the first part of September will look very ugly in affected areas and will remain at zero in some areas. After the flood waters clear out, people will begin to assess the damage to their vehicles. Many vehicles will be OK. Folks will clean them up and go on. Other vehicles will end up in a salvage yard. People with comprehensive insurance coverage will try to get their insurance adjusters to pull out their check book, and adjusters will try to minimize the payouts. Many older vehicles don’t have comprehensive coverage, and these folks are on their own.
Then the search for replacement vehicles begins – new and used. New-vehicle dealers whose lots were seriously flooded cannot sell those flood vehicles. The insurance company will take them off their hands. Some dealers experienced a total loss of inventory. Since the flood waters are still rising in some places, and more rain is expected, the full extent of the damage to dealer inventories is not yet known.
There is plenty of new vehicle inventory in the US – too much of it, in fact. These vehicles, in theory, could be transferred to Texas and Louisiana, and dealers in other parts of the country would love to get rid of them. But the excess inventories are largely in cars. Persuading Texans to replace their pickups or SUVs with sedans or compact cars? That’s just not going to happen. So there will be inventory shortages of the desired truck models. But it won’t make much of a dent, so to speak, into the pile of new cars accumulating on storage lots around the nation.
Some of these dynamics, including dealer transfers of vehicles into Texas, will kick off in September. Most likely, the first half of September is still terrible for sales, but demand will surge in the second half. Dealers in surrounding areas, including Dallas-Fort Worth, will see booming sales until they run out of trucks.
October: New vehicle sales in the affected areas will surge. It will entail a mad scramble to get trucks and SUVs from other parts of the US to dealers in the affected areas. Lead times with manufacturers are too long to respond to this demand spike quickly. The surge in demand will likely continue through the rest of the year and into 2018.
How visible would this surge be in the national numbers? So far this year, new vehicle sales in the US averaged 1.4 million vehicle per month, down about 41,000 from last year. If Harvey creates demand for 100,000 new vehicles a month, on top of what would be normal demand, for the rest of the year, so 300,000 additional vehicle sales in total, it would be just enough to bring total 2017 sales nationwide back to the level of 2016.
However, it will be an enormous logistical and personnel challenge for dealers in this region to get back on their feet, source vehicles to replace their flood vehicles, and source an additional 100,000 new vehicles every month for the rest of the year, and sell all of them. They will work furiously to accomplish this, but I doubt that it can be done.
Instead, the Harvey-triggered demand will likely translate into smaller sales gains in late 2017 – probably not enough to pull up the entire year to the level of 2016 – and will spread further into 2018, with pickups and SUVs experiencing most of the boost, and car sales languishing as before.
The asset class of Beautiful Machines deflates. Read … What the Heck’s Going On with Vintage Automobiles?
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Good article. Good questions.
I think most vehicles will be written off, but be available for purchase and repair by re-sell operations. I have no idea what people’s car insurance really looks like, and question whether being parked in a driveway and flooded will be covered by insurance unless specified?
Further to this, I would imagine (and excuse the pun because this is not a laughing moment), those with an underwater loan will simply let the banks or finance co deal with the problem.
Apparently, just 15% of home owners have flood insurance. the rest……? If you’ve just lost your home and all your stuff, a vehicle is the least of your concerns right now. Especially, one that is not worth what is owing.
I live on a river on the BC wet coast. I used to think our 8′ of rain over 9 months was pretty gloomy. (We don’t flood at our home, but the Valley I live in does every few years and we are occasionally cut-off and homebound for 1-2 days). We have had about 2 mm the past 2 months, with another 2mm possible in the two week forecast. Anyway, it just puts things in perspective and makes one think and better prep.
regards
As far as I can see Wolf, the Housteniers will be damned lucky to afford to pay off a new wheel barrow after they have been Harvey’ed let alone a noo set o’ wheels!
Them that’s still lucky enough to have a job of course.
One Houston woman interviewed said her insurance agent called her and told her the good news was that the woman would get a full payout on her flood insurance, $250K. The problem is that the woman’s house was worth over $1M before the flood. There will be many in financial shock after this disaster. The cars are the least of it.
Houston is also where the mega landlords own many homes. It will be interesting to see how they fare in this disaster.
Do the insurance companies pull the same crap in the USA that they do in the USA when it comes to home insurance:
Say you have insurance for $400,000 and you house is totally destroyed. The cost to replace the house is $500,000.
How much will you get?
$400,000 ?
$500,000 ?
Some other amount?
As you are ‘underinsured’ the insurance company will write you a check for the sum of $320,000.
That is 400,000/500,000 * 400,000……….you are only covered for 80% of the value because you are only covered for 80% of the ‘loss’.
On the other hand if you are ‘overinsured’ and carry $600,000 on the house and the replacement cost is $500,000, you’ll get $500,000. You wasted paying premiums on that extra $100,000 of coverage.
You can’t win.
Just wait until the insurance companies start requiring receipts for all the damaged contents as well………..
Should be “Australia” instead of the second USA
Australia == second USA got it.
I had 6 rentals and my personal home on the Gulf coast when Katrina hit. 1 rental survived. Insurance was as bad as the storm. Why I live in Colorado now.
Houston and south-east Texas will now suffer what New Orleans went through, during and after Katrina. Loss of population.
People will now migrate out of the devastated area permanently.
New Orleans and southern Louisiana have still, not recovered their pre-Katrina population numbers.
Look for large sections of Houston (the poorest) to become devastated wastelands of abandoned homes that are write offs, with attendant ruined vehicles and mountains of household rubbish.
It will take a complete generation for the area to recover.
Houston and New Orleans are completely different. New Orleans was an accident waiting to happen. New Orleans has grown beyond what is supportable in a delta. Houston will come back, but it may need to wait for the energy complex to get better. What will happen is that all the poor folk (many of whom were a criminal element) that left New Orleans and came to Houston will leave Houston and likely go back to New Orleans or somewhere else. this will be good for Houston.
>…may need to wait for the energy complex to get better.
You mean the price of oil to recover its glory?
Piece in Globe and Mail today saying that most of Houston shouldn’t be there either. It’s built on low, swampy land near water. If it wasn’t official flood plain before, it sure as hell is now. The forecast for record rain was delivered days before, so the ‘astonishing’ result was actually certain.
Maybe this will change some folks perception of science.
The piece is titled, roughly, ‘Harvey will bust FEMA’s flood insurance’
FEMA’s flood insurance, the ONLY kind that will be available was already in a 20 billion hole. So guess what? A few months ago Trump suggested raising the premiums to….(a) improve flood protection (b) improve emergency services or
(c) pay for THE WALL.
One difference between Houston and New Orleans, Harvey is going to much more expensive.
So if Feds decide they don’t want to continue providing flood insurance in a flood plain, is it rational to re-build there?
I had rentals during Katrina, 1 survived, and it got reclassified to be in a flood plane. Wind and flood went through the roof, as it will in Houston. I am lucky it is paid off so I don’t carry wind and flood, roll the dice. Just wind and flood last I checked would be close to $3k a year and this is on a small $80-$90k basic rental. Been several years ago and might have come down, but I doubt it.
What is a Houstonier? Some kind of Cavalier? Soldier?
May be and may be.
A Houstonier that is staying back now is probably either a soldier or very cavalier.
So there you go.
Someone from Houston who recently returned from Denver?
Good one about getting stoned. ?
I wonder, now with apparently large areas without electricity nor data connections, how are certain people coping, especially those that are used to use their plastic cards instead of greenbacks ? No possibilty to use a card and little or no cash at all available ?
Last year in the Baton Rouge flood, ATT failed miserably, they could not provide cell service. Only Verizon’s network was working. There was also no power in most of the city. In Florida, gas stations are required to have generators to pump gas. This is not the case in Texas or Louisiana. Those rescue boats and vehicles may soon be stranded from lack of gas.
Louisiana passed a law in 2006 requiring all new or remodeled gas stations to have generators to operate pumps in emergencies. Most that are not required did so anyway.
Correct.
Most of Baton Rouge did relatively well in light of the bad flooding last year. Some parts, e.g. Watson, LA didn’t do so well- being basically 100% underwater.
Houston will do better than New Orleans for various reasons. However, it will not be easy. New Orleans is a smaller city with fewer options (about where to build out of flood danger). The Houston area has huge areas of open land. Better choices will be made in rebuilding.
Also, the Texas flood is a more rare event. Katrina was not even really “the big one” for New Orleans, believe it or not. Harvey was the big one for Houston.
I have relatives in Houston. Army showed up and evacuated them yesterday to San Antonio. They are mostly plastic card people. They did not lose electricity. I am guessing those w/o electricity must have been evacuated earlier.
Like Katrina…cash only. And trades. I did it. Now imagine if we are on a full crypto society what it would be like there. No cash and you are full dependent on outside help.
The glaziers will be happy, but James Goodwill, the shop keeper not so much.
Every dollar spent to replace a car, can’t be spent on something else. It will be interesting how this affects Carmageddon, but it will also be interesting how this broken window fallacy will play out.
Someone will make a ton of money buying up the waterlogged cars and shipping them off for selling in less discerning places like Africa.
Once the port opens, that is.
At least its fresh water. After Katrina, salt-water corroded used cars showed up on lots all across the South East.
A car sits under water for several days (we’re not talking clean water,this is a toxic mix of chemicals,sewage and everything in between) We know the devastation of MOLD infection in water damaged houses,i can only imagine what it does to car interiors,carpets,upholstery etc. I find it hard to believe these cars are salvageable? anybody have insights on this?
Modern cars are run by electronics.
Once the electronics are ruined – finito.
That’s the Australian experience.
Older cars – unless the engines become hydro-locked can be salvaged
The Australian government go one further. If a car has been technically written off by an insurance company then that car cannot be registered for use in Australia again – i.e. becomes scrap.
People will try it. Running a carfax report is a must if one buys used after this.
The countries in southern and eastern Africa drive on the left side of the road (UK style), so US cars won’t sell there. Latin America, however, is a likely destination for these vehicles.
However, your main point is correct: beware of “good deals” on used vehicles. Unscrupulous vendors will do their best to unload “totaled” flood damaged vehicles onto the unsuspecting. This happened after Katrina, after Sandy and will happen now.
The only way to prevent it would be to crush the vehicles as they are totaled.
Most South American countries won’t accept used imports. The cars here are too big and too old for South America anyway. David you appear to have never been to South America. I live in Brazil part of the year. Most of South America is urban, not rural. Buenos Aires and Montevideo hold over 80% of their countries’ population. Brazil is the same way for the most part with most of population in large cities like Rio and Sao Paulo. Large or small trucks and large SUV are unusable because there is no where to park them.
Pat, I have spent time in Buenos Aires but that was 20+ years ago. I agree that big trucks wouldn’t do well in the urban environment there, but not every flooded car in Houston is an SUV, or old. I was only suggesting Latin America was where fraudsters might try to send their damaged vehicles because eastern or southern Africa drives on the opposite side of the road from the US, so no one there would buy them.
Perhaps Argentina should relax the used import restrictions, though. When I was there, the lane markings on the roads in BA appeared to be used for decorative purposes only. A big monster truck would have provided a much more secure ride!
Question, could they sell those vehicles in Mexico, Central America or the Caribbean?
From what I’m hearing a preponderance if not the majority of those directly impacted by the flood either have let their Flood Insurance lapse (because of course a major even hasn’t happened in recent history making many believe it never would again ) or didn’t have it to begin with so my guess is far too few will have the money to replace their flooded vehicles … either choosing to repair what they have and living with the oder .. or at best dredging up some bargain basement used something or other
I’ll also bet that regardless of all the ‘ rules ‘ and laws in place that a whole host of flood impacted cars and trucks will find their way back into the market … so buyer beware should that ultra discounted car of your dreams suddenly appear
“because of course a major even hasn’t happened in recent history making many believe it never would again ”
Wasn’t there significant flooding in 2001?
Wow! I had hoped my comment earlier would compel some commentary. Glad to read a full blown post.
I wonder what drives automobile sales. The new car market or the resale market? When sales of new cars slump dealers incentivize buying. This is analogous to pushing on a string IMHO. If a sudden mass extinction of cars both new and used were to occur due to a natural disaster and largely absorbed by insurance, it represents something akin to “Cash for Clunkers” proposition (albeit regional). But since its tight fisted insurance companies writing the checks, I expect no premium to blue book, and more probably low ball handouts to owners desperate to get a replacement in order to get their lives back on track.
With that in mind, won’t those buyers be forced down the inventory to cars they can afford, not the cars they want? I would expect some of the Government Assistance brought to bear in Texas and Louisiana to include a payout for transportation replacement. I’ll call it “Cash for Dunkers” and it will be good for all concerned.
Wolf, thanks for putting the logistics into perspective with your timeline. Trains and trucks bringing inventory back into the region will indeed take time.
>I wonder what drives automobile sales.
The availability of credit… say the “how much a month?” buyers.
Some will tow their car into the water…
^Yes. The best comment yet!
They could, once submerged, be refered to as a ‘Texas teapot’.
The Teapot Chrome scandal?
(rimshot)
Dealers included…
I expect uneployment and bankruptcies to increase in the affected areas, especially small and midsize companies are going to have a hard time to recover, thus layoffs to be expected. Smaller enterprises do usually have less insurance coverage than larger corporations. The service sector will probably be hard hit, a lot of restaurants and mom and pop shops will probably be out of business after this and folks that haven’t had ( usually couldn’t afford ) insurance will be financially hard pressed, thus surviving restaurants and shops will se a decline in business. And people with mortgages and no insurance and damaged houses will find themselves between a rock and a hard place, just to name a few aspects, And it will take years for most affected communities to recover.
Katrina victims who owned small businesses were still waiting 3 years later for insurance pay outs. I met a chef and his wife and they were waiting that long and obviously could not rebuild their restaurant. To add insult to injury…they were waiting as long for a FEMA trailer to park in front of their damaged house to start rebuild. So basically even though you have proper insurance it is still a clusterf*&k.
This is horrible now and going to be horrific for a decade!
Please donate!!!
But please … more importantly .. donate only to legitimate and verifiable organizations . And donate money … not goods .. they have no resources to store them and 90% of what people send is superfluous and unneeded .
As a not so subtle reminder …. Katrina spawned an entire industry of fake charities … charities where less than ten cents on the dollar found its way to worthy recipients etc etc – et al – ad nauseam ( emphasis on nauseam ) as did S’Nor’Eastercane Sandy and just about every other disaster previously .. and I’m sure Harvey will as well
Ahhhh the human condition … always ready and willing to take advantage of or make a buck off of one victim/tragedy or another
First responders need socks, underwear and undershirts. That can be sent directly. My Houston Sister said it appears they are doing OK with diapers and baby formula but the kids need colors, coloring books, puzzles…stuff to do.
The scope of the disaster seems to require action by the ‘administrative state’, which so far still exists.
There is still an ongoing process of flooding. Other counties are now under mandatory evaluation as rivers breach the levies, which means that water will flow downstream flooding Houston proper even more. I would say less than 1% have flood insurance as all of the FEMA maps are outdated. I am from Houston and most of my family is there…luckily they are all safe and sound but stuck. This is going to take years to sort out.
A 60’s car being submerged and a late model, same fate, one are two different things. Maybe the engine electrics will survive because they have to be sealed against water arriving via deep puddles.
Not so sure about motors for power windows and doors.
The water I saw looked pretty foul, a week in that might do her as far as cleaning goes.
This isn’t like a car gets too far on boat launch and is pulled out.
It goes straight to shop before corrosion etc. sets in.
How long before these thousands of cars can see shop?
One odd thought: this flood was much worse but most times you see cars flooded half way or more to door handles. If a guy had a couple of short, steep ramps like you can buy to work on a car, but steeper, raising the front end 2 or 3 feet on storm warning would save the motor etc. in many situations.
I often wonder why people don’t drive their cars to safer higher ground when something like this is forecast
Ever check how much fema pays a person with flood insurance it’s a joke.
I thought the insurance companies pay for the insured claims, at least that is the explanation for my rising rates after the Calgary flood and Ft Mac fires.
Homeowners insurance in the US doesn’t include floods. Even in Florida during hurricanes they only cover damage from wind if you buy the hurricane rider. From my tv viewing today, they say that Fema is the only flood insurer and their max payout is 250K for the house and $100K for the contents.
FEMA (the taxpayer) is the underwriter of flood insurance, but private companies, handle writing policies, collecting premiums and claims.
(a recipe for disaster or oligarch owned rent seekers to profit – sorry I had to put that in)
The National Flood Insurance Program is broke. They had to borrow $25 billion from the Treasury (taxpayer) to cover claims from Katrina and Sandy…they still owe $24.6 billion.
Wonder how much they will “borrow” to cover this disaster.
It’d be funny if it wasn’t so sad.
They should just take it from SS Oh right they already raided that fund
Isn’t the NFIP about to expire towards the end of November ? And then it is up to congress to renew its charter.
This one will dwarf Katrina for $. May be the end of the line for flood insurance in flood plain. The Feds are not a bottomless money pit.
Maybe a lot of Houston just shouldn’t be there.
Crazy?
Like what just happened?
The Calgary flood victims were so effing lucky. Alberta was still riding high on $100 oil, and the gov was very generous.
Same deal today, very different.
BTW: I was raised in Calgary, left after 25 years at age 30.
Re: the flood in High River, Alta, smaller but bad.
Guess why it’s called High River.
Actually they have learned to pay properly, they do not however pay depreciation, loss of use and contractor overhead and profit. Would probably be best if they left it to market insurers, premiums would rise but this would hinder development in coastal areas and hammer property prices also.
In South Louisiana home prices have begun to reflect this principal as homes which are in higher premium areas have lost value versus those in lower premium areas since Biggert-Waters Act. (Consumers take the cost of insurance into consideration when comparing home prices)
That Harvey will have any impact much on car sales. Aren’t these flooded areas filled with people who could end up largely living with or near relatives in other parts like Mississippi, interior Texas or back in Mexico? Aren’t people with buying power options living for the most part north and west of Houston?
No. The toniest enclaves are still inside the downtown loop close to all of the cultural venues and most upscale shopping/restaurant venues. Way north or way west means you cant afford to live there.
Mississippi…HUH??? Interior Texas?…those who wanted to be in Austin find life is getting really expensive there. Mexico?….those people will fare the best as they will gladly take the jobs to clean up, rebuild, etc.
Have you not watched the news? This is catastrophic for everyone!
I am getting pinged with messages about my friends who live in really nice neighborhoods and they are being devastated. This is not a rich and poor thing. It is everyone.
People left Katrina destruction for Houston, so I would think some could make their way back. Maybe a lot won’t be built back down there. This just adds to the imbalances in the U.S. Maybe this breaks the camels back.
Like TheDona, I’m a native of Houston with family still there, even though I now live in “interior Texas” which you point to as negative in some vague, nebulous way.
Houston will rebuild. This is a resilient place, full of people who have been knocked down and gotten up again. People move to New Orleans to enjoy the food, the music, and the laid back lifestyle. People move to Houston for their careers, to get ahead economically. It’s a mind-set – one that will last long after Harvey is gone and will drive a rebuilding that will take much less time than the pundits and naysayers believe, even though it will be a long hard slog to get there.
Problem is all bets are at least the remnants if not the SOB Harvey itself is heading straight for New Orleans after it finishes with its current path of destruction in east Texas .
In defense of TheDona and in answer to all those trying to make light of Harvey’s massive destruction first off full discloser ; To quote the song lyrics of a good friend of mine ” I’ve been to Texas and didn’t think much of it ”
.. but the fact is … this is a disaster of epic proportions which much like S’Nor’Eastercan Sandy is showing no favoritism or prejudices towards any segment of the population from the upper reaches .1% to the barely legal immigrant in fear of deportation
So all personal prejudices and bias aside … there is nothing about Harvey to make light of . This … is a mess . And a mess that won’t be mitigated for years if not a decade or more .
People from Katrina were bused in from Superdome to Astrodome. They didn’t just decide to come here on there own. Crime rate went way up in Houston. What do these people have to go back to in NO? The poor areas were not rebuilt there.
If I am reading between your lines….maybe some of these unemployed poor will disappear to greener pastures? Better to be a professional looter in Houston than some other places.
There are areas (and yes nice areas) in Houston that have flooded multiple times. Those who have flood insurance just keep rebuilding. (This needs to be changed.) There are areas where the less fortunate just take their chances because it is affordable.
Regarding the rest of the Nation: the Port is out of action and and the refineries are shut down. Most likely the biggest impact for the Nations energy supply in decades.
Thanks David! I got a little heated. And yes I live in the interior now too.
Maybe
Don’t be too sure David. I watched the Katrina rebuild and the effects of insurance. Costs went way up and affected rebuilding. Shortly you will see rezoning and flood zones might rise 10 feet. Wind and flood only through state and federal pools and cost out the ass. Properties all along LA and MS coast still not rebuilt 12 years later.
Not sure about Harvey doing much for Detroit’s sales figures, I’ll leave that to Musk, I’m sure focusing on that alone shouldn’t absorb my bandwidth but I do anticipate there will be plenty of cleanup work.
For instance, sticking with the familiar theme of corporate welfare and no crisis should go (un)wasted, how much temporary housing and assistance demands will FEMA likely provide? The list is lengthy.
Yeah! go GDP go GDP! But of course, after you suffer huge losses, even net of insurance recovery, you run out an buy a car? Is that before or after you see if your job is still there, find a place to live and buy some new clothes. If good times make for good car sales, then bad times make for good car sales? Somehow I need to learn to read, write and think again. Me thinks a lot of these people will never exactly recover financially.
If you live in Texas, you’ll likely need a car to get to work or do anything else. There is some mass transit in the big cities, but for most people it’s too far away from where they are or where they need to go. So a vehicle is often the number one priority. You’re just screwed without it. During the housing crisis, people made their car payments even as they defaulted on their mortgage.
Having spent more time in Texas that I care to admit to allow me to 2nd your comment on the need for cars due to an abysmal lack of public transportation and the massive distances between towns and cities in full
The record debts in housing and vehicles, along with the many stories of people already just getting by (some say as high as 75% of the population has virtually no savings), makes me wonder who will loan an impoverished overly indebted family/person/small business more money to do anything. How about the B/M retail sector? Will those stores ever re-open? This storm probably couldn’t come at a worse time.
I have seen the pictures of not only the houses destroyed but bridges, roads and infrastructure that is damaged beyond some simple repair. You can’t even fix the power until you can get around.
I wonder how the government with already skyrocketing deficits will deal with this. Will they try and cut Medicare again to fund the needed infrastructure rebuild that will be needed in SE Texas? Or will they willingly add to our already outrageously high deficits?
There are strong groups in the government that preach personal responsibility and limited government. There are the Free Marketeers who think that every thing is best done by the private sector. Let’s see what they have to say when one of the major fuel producing areas is crippled. Will they still stomp their feet and say it isn’t the governments job… Or will they turn into obvious hypocrites and vote to spend taxpayer$ to rebuild SE Texas and maybe SW Louisiana.
Remembering that FNM and FRE are the largest holders of mortgages too… So this is going to be a huge deficit buster no matter what else..
And we are sending more troops to Afghanistan to protect the Chinese rare earth minors? And the opium poppy growers?
“who will loan an impoverished overly indebted family/person/small business more money to do anything.”
Pretty sure I’ve seen this movie before so let me guess… Is it the same ones who play golden violins for taxpayer bailouts?
In all likelihood they will be hypocrites.
It’s like the bankers who say that they are pro-free market. Then when the inevitable crisis occurs due to their lobbying for deregulation and speculation, they get bailed out.
I flew down to Houston area from Colorado to purchase an AWD Honda Element in 2011 from Texas Direct Auto. I think they should go through their customer sales base and make an offer to us out of the flood area to get their inventory back up. I’d be willing to drive down if the deal were in my favor (more than private sale and somewhat less than dealer sale price). Perhaps I should give them a call.
If you live in most places your life is better with a car. In my city it’s practically essential.
For a certain type of person who is intensely urban, and wants to work, live, and play within a small but dense environment, it can work fine. Especially if there is a good bus system.
In my opinion a disproportionate of attention/ envy is directed to this choice, perhaps because TV sit-coms are usually set there.
But in Big Bang Theory, Sheldon is constantly bumming rides.
There seems to be suggestion that, even if by the skin of your teeth, you can locate in London, Paris, NY, SF etc. you are a success, even if your life is severely truncated in many ways, including financially.
My nephew, who was a millionaire at 30, lives in Vancouver on the 38 floor, a lifestyle I could not endure, even with the money.
Personally I need weekly exposure to near wilderness to stay sane.
When I visited my ex in Montevideo, Uruguay I missed the Vancouver Island woods, which are a ten minute drive from a regional shopping center near me.
When my ex visited here she missed the bustle of the city.
So… different strokes.
Simple solution Move to somewhere that DOES have a good mass transportation system Buying a car when you haven’t really the means to support that car is madness Just wait till fuel prices begin to surge what will happen to affordability especially for all the huge pickups and SUVs Kunstler is spot on
Places with good transportation systems are the high density condo-ridden areas where I don’t want to live.
My Civic (1700 cc) gets 40 mpg.
For the cost of a return bus fare: 2:50 each way, it will go make that trip dozens of times.
Even if I wanted to live in a high density area, the extra rent would be more than the upkeep of the paid for car. (Basic insurance only 45 per month)
But the POINT is, if you don’t want to own a car. don’t. But for the rest of us, being able to go where we want, when we want, is worth paying for.
Also the expensive high density “GREAT public transportation” areas also have the most homeless, the most crime, the most people on food stamps, the highest poverty rate, the most taxes, etc. I will pass on that and keep my car and my paid off house in a safe affordable neighborhood with a 20 minutes drive to all the hip venues or cultural centers I need.
Google top 10 cities for most taxes, most crime, most homeless and so forth…it appears the largest common denominator is GREAT public transportation.
More and more it looks like the only real solution for disasters like this is to be prepared to do for one’s self. Obviously, this is not possible for most people but if folks were more aware there is no Knight riding in to fix much of anything because they can’t, they would not (as Petunia pointed out) have a home worth $1,000,000 insured for $250,000.
The Country is broke and fighting about what the next round of debt will be spent on. This is not like the Country has a rainy day fund for contingencies and emergencies. Officials balked at helping after Sandy, and Katrina is still being dealt with. Will Texas, being Texas be treated any better? Maybe. I do know this, any money spent will be borrowed and paid for by currency debasement. There sure isn’t any 4% growth going to pay for much of anything.
What if the refineries stay down for weeks? Months? Harvey, N Korea, debt ceiling, Russia investigation, revolving White House staff, and everything else not to be mentioned in a non-political blog may portend one of those moments; “This is when it all started to unravel”, whatever.
Cars are one aspect, for sure, but what broke my heart was seeing the residents of the seniors home sitting in their wheelchairs with water above their waists.
This is not like the Country has a rainy day fund for contingencies and emergencies
Thats kinda similar to those TV programs about people going bankrupt while smoking, gambling, running 4 leased cars, subscribing to everything there is on cable TV and always eating out: These folks NEVER, EVAH, have any money to spare for like bills and stuff either, never mind savings.
Why not de-bloating the military a little? Defund the CIA for arming ISIS? Actually … Just by dropping the losing effort in Afghanistan, that would easily cover what is basically “just” a 100 Billion or so setback.
It’s just setting priorities. Most housewives can do it!
The home might be valued at a million but 250K would probably be more than enough to do the required renovations to bring it back to the preflood condition Doing some of the work yourself could lower that substantially as well but most probably won’t want to get their hands dirty
I read that “only” 30,000 people have actually been forced to flee their homes, which is a lot, but still a small percentage of Houston’s population. The media has a habit of only reporting from the most dramatically damaged areas, and re-playing the same videos over and over, so we won’t know the true extent of the damage until some more responsible agency starts taking inventory. There are plenty of pictures of submerged vehicles, but the actual number may be relatively small. I don’t know if an auto boom will follow, but carpenters shouldn’t have any trouble finding work for a long time.
It will also be very good for our lumber industry here in Canada, at least for the wind damaged areas. Too bad there is the 30% tariff on lumber heading south. The tariff works out to around $1500 per home. If a house is flooded, (I’m a carpneter), the framing might be just fine provided everything is stripped out before black mold sets in. Drywall, insulation, electrical will all have to be replaced including furnaces/AC, etc. A home will require a thorough drying at this point….big fans, etc. Then, there is the flooring and trim to do after the guts are replaced. Everything will have to be tested and assessed; signed off by someone. Sure, it’s fresh water inland; laden with sewage, chemicals, pesticides, dead animals, whatever.
Take a number. years?
It will probably be cheaper to just bulldoze and rebuild in many neighbourhoods. $250,000 FEMA insurance will just about buy a new modular home. It sure won’t replace a McMansion suburb home.
The greater question is the national conversation that will have to one day occur. When will ‘some’ coastal cities be relocated and when will they be rebuilt somewhere else? Or, will this be decided by industry and markets all by themselves? This time it will depend on the refineries. This time.
I’m thinking of Miami and New Orleans in particular, but I am sure there are hundreds of communities at real risk. The Atlantic hurricane season is just 1/3 along, and usually peaks in September. Hopefully, it will fizzle out although there is only a 20% chance of below normal and 45% chance of an above normal year for 2017. It must be absolutely terrifying to go through a big storm. I’ve been through 80mph sou’easters on the west coast with 6″ of rain overnight and I thought the world was ending. Apparently, it was a walk in the park.
minor point: very little lumber is used in flood repairs, lots of drywall, paint, cabinets and flooring materials, which if they contains wood will most likely come from China. Appliances also do not involve lumber.
Market will take care of it, like many properties on the gulf coast still not rebuilt. The thing that will do it is they rezone 10 feet higher and wind and hail insurance skyrocket.
They may be damaged by floods and insurers will pay out but we’ve seen what happens and many of these cars end up being sold and back on the road again. It happened after Sandy. They brought a pickup truck back to the prior owner he opened the glove box and his tools were inside rusted shut. Always look for signs of flooding and rust in used vehicles. No one cares about the buyer’s safety.
Let me explain the “broken window” economy to you. you see this will give GDP a lift, more cars are needed, home repairs, wood, cement. Booyah! its a bit tough on insurance companies, who will raise their rates like they always do.
All funded by more debt when people and small business are having a very difficult time paying for the consumptive debt they already spent.. Sure, sounds like a workable plan! There is endless money to be spent by the Ostrich Society. Damn the Torpedos, full speed ahead!
After of course, selling your first, second, and third born into debt servitude for their entire life.
Ambrose You got it They will have to raise rates which will leave the consumer with less money to spend than before the storm So where’s the net gain here It seems like the costs just get passed along and ultimately the little guy just gets poorer
Looks like global warming/extreme weather events can work as a GDP stabilizer. Who knows?
This may delay the car bubble pooping for six months to a year at most. Highter interest rates won’t help and we will have done by the end of the year.
“delay the car bubble pooping for six months”
What a visual to now clear from my mind…. a pooping bubble, or a bubbling poop. Arrrggh!
When the insurance money comes in, it becomes a question of how much was owed on the existing car, and what can be done with what is left.
Vehicles will probably be a priority though, as they are an absolute necessity there. I’ll be curious as to how real estate does there.
There is a point where the “broken-window” economic theory ceases to make sense, and I believe this is it. It can make sense if the general economy was strong to begin with, and has a platform from which a disaster like this can spring up. But that’s not the case here. Esp in Houston.
I was looking at some of the local affiliate pictures of the flooded area(s) (huge swaths), and I figure most of those business aren’t coming back in their pre-Harvey form. If at all.
I predict a massive diaspora from Houston after this storm recedes.
The ‘broken window’ theory is useful for proving that GDP has no relation to real economic growth.
It’s absurd to suggest that devastation is a NET benefit.
If it was, just torch the entire country and we can all enjoy the huge GDP.
The GDP also masks a lot of government waste. If the gov builds a pyramid, it increases GDP. It is useful to note that the old term for GDP was Gross National Expenditure, which is more honest.
Because you can have expenditure without product.
If we burn down a city and then re-build, there is expenditure, and under gov accounting, increased GDP.
But net, there is no product: (minus CITY) + (CITY)= Zero
Nick isn’t that the reason people like John McCain are always pushing for mour war Destruction can be very profitable for his friends/ handlers
I had a flashback of Katrina when Barbara Bush toured the poor,displaced victims in the Astrodome and said what a great improvement it was them to be there. Wonder where she is now?
My guess Kennebunkport or Uruguay but probably the former It’s Summer in the Northern hemisphere Or is it Paraguay I always confuse those two
Carmageddon update [ partially unrelated to the Harvey mess ]
AW today is reporting used car sales ( along with new car sales ) are plummeting as over supply and under demand firmly sets in .
Somehow in light of the financial plight many in Harvey’s path are in I doubt the ‘ broken windows ‘ syndrome will do much to mitigate this
Begging the question ; So what do the dealers do now ? They can’t sell new to save their lives .. and now they’re in dire straights with used as well .
Sigh … the most likely answer ? Resort to magical thinking once again leaving common and good business sense behind . e.g. SSDD
Hmmm .. also in todays news .. FCA is definitely FSBO with the most likely buyer being the Chinese … Audi’s had another major internal shakeup … Volvo’s US sales are plummeting like a lead anchor in a bottomless pool despite the companies claims they’ll increase sales 80% by 2020 … etc – et al – ad nauseam …
Ahhhh … but back to Harvey’s onslaught …looks like the beast may be contributing even further to the woes of Carmaggedon nationwide as oil and gas prices are predicted to rise .. throwing another blow into whats looking like the August from Hell for car sales across the board
Hmm … perhaps the term Carmageddon as brilliant as it is may not be strong enough for whats coming down the pike .. ehh ? So what is worse than armageddon/carmageddon ?
Insurance companies don’t tell owners to just clean a car up. Owners will get paid on the spot if it’s remotely flooded. Only a few inches of water inside from a typical run-of-the-mill flood will ruin a car, let alone a hurricane or 50″+ rain! They won’t have time to piddle around trying to determine if a car will or will not be salvageable—negotiate a price and print the check out on-site.
That’s exactly how adjusters pay out the least amount of money: the promise of an instant check. That’s accepting their fist low-ball offer. You trust them because they’re your insurance company, right. Ha!
Even if the car is totaled, the insurance company will only offer to pay you what it thinks the car is worth (less deductible). The value of a used vehicle is very much negotiable.
I never said anything about trust. I’m as skeptical as the next, but not all offers are bad.
On CNN Money a headline says 1/2 million cars might be destroyed by harvey.
If this is stated in above comments, my apologies.
http://money.cnn.com/
In the article I calculated/guessed that 800,000 cars might have gotten flooded, and that 300,000 of them would be replaced by new cars, and the rest would either be replaced by used cars or would be repaired. At this point, no one knows.
Only cars with full coverage will receive insurance payouts.
And in Texas, about 13%-20% of drivers do not carry any insurance at all, much less full coverage.
You only need comprehensive for flood damage, actually. And my comment was obviously predicated on having such.
Great and the ratepayers get screwed again Whatever happened to personal responsibility Not saying there aren’t plenty of legit cases but people could have taken precautions Having insurance might be a crutch for many lazy people Funny how I never collected a penny from either homeowners or car insurance in 45 years Coincidence I don’t think so
Aren’t the builders salivating over this?
Thousands of homes need to be gutted and rebuilt.
Not enough workers, not enough building supplies, thousands of fly-by-night companies arriving from out of state.
It will be a mess for sure.
I’d bet for many working poor and some middle class folks that car is not getting replaced for the foreseeable future.
It’ll be a mix of Uber + bus + stitching rides from friends/fam.
I’m going to guess the end result of Harvey will be a push to improve public transportation in Houston. Because cars are friggin’ expensive. More and more people simply can’t afford them.
All Harvey’s done is greatly increase the financial loss that owning a car equates to. Instead of throwing your money away over the length of a 6-year loan, Harvey made your car worthless overnight.
Cars are evil money-suckers and it’s only intentional acts like buying up and ripping out streetcar systems and massive propaganda, making cars “necessary” that have kept the auto industry going at the rate it’s been. People are wising up.
Get a grip. You couldn’t be any more wrong if you tried. “Propaganda”?! Check your reflection in the water.
Exactly true Kunstler has preached this sort of thing for years The Un sustainability of Americas suburban/ car oriented society
Yeah, right; a street car system sure would have helped evacuate all those people.
I wasn’t referring to evacuation I was talking about day to day commuting by lower middle class folks who obviously are being hard pressed economically to own and operate a car As far as evacuation I’m not sure what the answer is but from what I’ve read a lot of people were warned to leave and didnt
“Warned to leave but didn’t”….
Here is what happened in 2005 mass evacuation for Rita: “In searing 100-degree heat, cars crept up north I-45, windows down, air conditioning off to save precious gasoline. The traffic jam stretched for over 100 miles and has been going on for over a day and a half. … Gasoline was not to be found along the interstate and cars that ran dry made the gridlock even worse. Abandoned vehicles littered the shoulder lanes.”
More people died on the road (heatstroke for example) than they did in the Hurricane. One of my sisters spent 6 hours just trying to get out of her neighborhood before she just gave up and went back home.
The mayor said to stay put if you can to avoid the disaster from Rita evacuation. Thank goodness he did. Can you imagine how many people would have drowned in their cars trying to leave?
With 50 inches of rain people were better off with a foot of water in their house than sitting in a gridlock of rapidly rising freeway water with no place to go. Have you seen the pictures of the freeways? 10 feet of water in some of the underpasses. Most of the roadway completely covered over.
This is the worst flood in US history….how do you prepare for that?
If they do it right evacuating can be done. They have to contraflow the interstate, both sides only go out of town one way, and it can be done. They didn’t. MS and LA do this. People that aren’t used to hurricanes always wait too late to leave, same as everybody else there.
Wolf,
The 1.6 vehicles per flooded home is probably a bit low as most driveways and virtually all street parking is lower than the home which they service. Many who have no water in home will have had water in their vehicles parked in the drive. Those living in upper floors of multi unit buildings may have a flooded car but dry floors. Also the Port of Houston (on the ship channel in a low lying area) is a major point of entry for automobiles.
Realist ==> his comments are very realistic ==> the new situation in Houston will lead to ==> Cullen Frost problems ==> to JPM problems.
A potential government shutdown will blow every Houston promise in
the wind.
$WTIC, including Canadian oil ==> under prolong blockade.
Houston recovery will crawl like Midland Tx recovery.
Isn’t Houston known for little to no zoning ? Going to be a lot of bulldozers
running non stop.
http://www.econlib.org/library/Enc/CreativeDestruction.html
Jobs jobs jobs, no job, no car, no house, no apartment
Houston airport is shutdown, economy loss
No body mentioned car rental companies, how badly they are fucked, nobody knows
Wolf, congrats on a great story subject. This site is great for us average Joes to get good information. I’m a car guy (not sales though) and appreciate the fact that you were in the business and see the big picture on this and other topics. Your comments about getting around in Texas are on point. For most people here cars/trucks are essential, very close behind in priority to shelter.
Mile upon mile of damage to massive infrastructure and countless homes and cars, yet it “only” adds up to 40 billion dollars or so. That’s less than Draghi has been creating every month for years. As the pictures from Houston show, $50 billion buys a heck of a lot of stuff. Where the heck is Draghi’s €60 billion a month going?
so, here is a quasi-demographics question….
what percentage of the houston economy is the automobile business?
this should include new car sales plus used car sales.
if it can be broken down into new versus used, that would also be enlightening.
for purposes, i would consider leased vehicles as a part of the new car sales figure.
sales of vehicles off lease should be considered as used vehicles.
any finer level of discrimination would be welcomed.
thank you
Great article, and very interesting (collective) POVs.
I wonder how Harvey will affect mortgage rates and the real estate market in general, nationwide..?? I mean it will obviously decimate the market in Houston and neighboring cities (and perhaps states also). But I wonder if we will see interest rates and/or prices increase or decrease..??
Don’t mean to shift the conversation from the article or cars in general, but just finished reading all the comments and saw no mention of nationwide impact on real estate prices and mortgage rates; and was wondering what your thoughts are on the matter.
Thanks!!
I think the US housing market has other much bigger factors to worry about than Harvey That storm shouldn’t have nationwide consequences in my opinion
Well, there is always a silver lining in every dark cloud. Of all of those vehicles deemed a total loss and branded with a salvage title, many of those could be rebuilt and offered to those on lower economic tiers at a robust discount from a similar vehicle with an unbranded title. Those folks most needing a discounted used car could end up with a substantially newer (albeit far from trouble-free) vehicle than before the flooding.
If the motor/ trans is underwater for days and needs to be taken apart, rebuilding in this market, flooded (sorry) with good used cars, my guess it won’t be worth it.
Not to mention rotted upholstery which is expensive to replace.
Also, I believe an auto trans has electrically operated clutches inside.
Look soon for law that flooded car must have it on reg.
Here in BC it’s on title as ‘rebuilt’
But rebuilt after accident and after flooded for a week may be different kettle of fish. (Jeez, sorry again)
Motors, transmissions, transaxles, and the like are sealed. The only way anything can get into an engine is via the air intake, the fuel system, or the exhaust system. All of them enter the motor essentially at the top (cylinder head). So if the car is in 2 feet of water, or if the pickup or SUV is in 3 feet of water, the engine should be OK inside.
All computer systems are in sealed black boxes. What might get squirrely after being submerged in water are sensors and actuators and the like… which could be a nightmare.
Ya I wasn’t thinking. Of course they have to be sealed, else lubes would run out. And I’ve had a car with a leaking seal.
I think upholstery may be a deal breaker, for sale in US anyway. That work is labor intensive, I doubt typical shop would be interested except to farm out as part of total restoration on premium car.
reading the comments on here most people get it. tons of bankruptcies coming up. Houston area will be a ghost town, forever changed. Here is what most of you are no getting. damage to infrastructure . bridges and roads damaged, washed away. railroads washed out and will take months to repair. what can be moved in by rail will be taking forever by truck now. News cars and building materials sorely needed will be scarce until the roads and rails are rebuilt
Do not fear, Texans. Your pickup withdrawl pains should be temporary.
The Ford plant at Claycomo has hordes of F-150s parked in storage lots in KC, just looking for a new home.
(Will send pics as soon as I can locate a decent vantage point)
TheDona and others who actually live or have lived in Houston get it right. The mayor was absolutely correct in the decision not to evacuate. A number of friends and relatives were part of the 2005 Rita evacuation – 24 hour traffic jams, etc. – and every single person swore up and down they would never do such a thing again.
So far, there have been only 18 deaths (vs. 1,800+ in Katrina), a remarkably low number given the circumstances. And six (or 1/3) of these were due to the driver of a van ignoring the rule local authorities keep repeating time and time again: do not drive into any water of unknown depth, since it takes very little water to sweep a vehicle away. One driver made a foolish decision and his family died. A very preventable tragedy, hurricane or no hurricane.
As to the comments predicting that Houston will become a ghost town, with roads, bridges and rail swept away, I’ll reiterate my earlier comments about Houston being a very resilient place. Many of the freeways are already open. People are at this moment going back to work. It will be a long, hard slog, but there is a spirit of enterprise in Houston that will rebuild the city much faster than any of the naysayers believe possible.
When he made that decision it was already too late to try. I have been through several including Katrina. If he would have made the call a day earlier and turned all the roads one way….all roads flow out of town including the interstates….it could have been done. Most people have the 24 hour mentality to leave…I did too. That jams up everything with normal traffic flow. Reason Katrina had so many deaths there was a 28 foot tidal surge and they found wave marks on a water tower where it came ashore in Waveland. Next time you see a water tower image a 28 foot tidal surge with waves that hit it.
A bit off topic but consider the struggling retail business that are flooded. Most do not have either flood or business interruption insurance. I bet many tenants will breach their leases betting that landlords will not likely sue for defaulting on the lease. Think cost to sue plus jammed courts, finding a lawyer as most will be suing insurance companies, timing of hearings etc. As such, most landlords will not spend the time or money going after a tenant. This will create vacancies in retail shopping centers etc. making commercial properties lose income which will trigger other loan covenants such as cash flow sweeping if income / vacancy exceed certain levels then eventual loan default. The domino effect will be incredible.
After Katrina I didn’t hear of one landlord going after a tenant. I know several and I dwelved in the housing part. They knew it was useless and also not cold hearted enough to beat down their neighbors in a disaster. Even the residential guys I knew didn’t go after people that left with fixable damage, of which I was one. I was part of a real estate club there and I don’t remember taking a tenant to court ever coming up right after the storm. Commercial or residential.
How are people who have lost everything going to finance new cars?
Oh, that’s right. The TAXPAYERS will finance those new cars.
let’s talk about how the infrastructure is financed in texas[and other states].
property taxes.
so, consider that a residence is appraised for taxing purposes at $1,000,000 dollars.
then it becomes flooded. appraised value drops to less than $250,000.
imagine this drop in appraised values occurs in all of houston’s swell areas[river oaks, tanglewood, memorial,et alia]. what happens to a city when the relevant property tax receipts drop by 80%?
schools financed, operated by revenue from property taxes will die.
all the rest of the infrastructure will die of financial neglect.
and it is not just residential properties that will be affected. industrial and commercial property values will also fall drastically.
to the point where houston will either have to radically raise property taxes or become a city like buenas aires – a wreck.
houston will become a ghost town. because it will no longer be habitable for the middle class. everyone will be moving away.
the engine for houston, the hydrocarbon industry is already in a property retrenchment mode. escaping houston city limits for reduced property taxes in the burbs. and, they have been laying off employees fiercely over the last 3 years as the global hydrocarbon industry has been declining.
no matter how much pollyanna propagandizing has been appearing on television, houston is a city moving towards irrelevance. today the 4th largest. tomorrow, not even in the top 10.
I lived through the 1979 tornado(s) that destroyed about 1/3 of Wichita Falls, TX. And I mean flattened. If I remember right, 65 people died. Shopping centers, churches (the thing went right down church row), everything in its way mowed down. A large part of the city’s housing stock gone. The path was 3/4 miles wide and several miles long. Devastation was huge. It took time to rebuild, but it was rebuilt. Never underestimate the will of Texans to tough it out.
Amen.
The need for 1 million replacement vehicles is a god send for the auto industry. Carmageddon has been cancelled, by an act of nature.
That assumes that people can pay, which many cannot.
Keep in mind that many don’t have full coverage insurance. Even those who do may find themselves only getting partial payments and facing a lengthy battle in court with their insurer.
The average American, and by extension, the average flood victim is under siege with limited savings, as wages decline while costs rise.
– There’s one reason why Harvey caused more damage. Keywords: “Zoning Laws” (or the lack of them).
– Texas seems to hate (government) regulation. And the lack of regulation (zoning laws) allowed people to build houses that are located in the flood zones/floodplains of rivers and canals that run through the city of Houston.
– I am NOT saying that with those zoning laws the amount of casualties/dmage would have been (close to) zero. But it certainly would have reduced the amount of casualties. I read that some 7000 homes/building were build in those floodplaines in Houston.
– Sometimes government regulation is simply meant to protect people but if the people ignore those well meant regulation, ………………….
On Bloomberg today they had a reporter at an old motor racing course where all the damaged cars-vehicles are being taken for insurance review.
In the five minutes it was on sports cars, SUV’s loads of vehicles were being towed in.
The impression given was most of these would be written off.
Quick question, do the insurance companies actually take possesion of the damaged vehicles in dealerships? How does the public know VIN numbers of inventory and disposition of such, because CarFax is not mandated to record such losses by statute. Or is there an actual database by the state?