September 06, 2017
September 06, 2017
September 06, 2017
April 07, 2017
March 09, 2017
As the Hurricane Harvey storm system dissipates and the water it dropped recedes, Houstonians left without shelter face the daunting task of rebuilding their lives. Many people are focused on the staggering figure of 40,000 homes lost, but another number also deserves close scrutiny: The flooding destroyed as many as a million cars in the Houston metro area.
Reliable transportation is a daily, fundamental need, almost more so in the wake of a disaster. Add in the fact that Houston is a car-dependent city, and the consequences of the destruction of so many vehicles comes into stark focus. How will rental companies and dealerships suddenly supply cars to people who need them right now? How do people get permanent cars? And what is the fate for the many people who can’t afford to replace their way of getting around?
“You really have to have a car if you’re in Houston,” says Andrea French, executive director of Transportation Advocacy Group Houston, which advocates for better funding for all modes of transportation. People in the city center may commute by bus or bike, and Uber and Lyft have made it easier to go without a personal vehicle, but as a rule it’s hard to get by without your own wheels. That’s why 94.4 percent of households in the Houston area have cars—1.8 each on average, according to analyst firm Cox Automotive. Only Dallas has a higher percentage.
As of Thursday morning, insurance companies had received about 100,000 claims for cars hit by Harvey’s flooding, 75 percent of them totaled. “In an event like this, that number’s gonna be rising daily,” says Mark Hanna of the Insurance Council of Texas. “There are probably cars still submerged that people can’t get to.” A lot of people are just now returning to Houston to assess what they’ve lost and start rebuilding.
Counting just licensed cars (though many of the destroyed were waiting on dealer lots), the cost of the losses sits somewhere between $2.7 and $4.9 billion.
The need for replacement vehicles, therefore, is massive and immediate. For many with insurance, the first step will be getting a rental car until their payment comes through and they can take home a new forever car. Exacerbating the problem, bereaved car owners aren’t the only ones in need: FEMA staff, emergency services, and other groups like the Red Cross also have to get around.
To cope with the surge in demand, rental companies are shipping thousands of extra cars from all over the country into the region. “We are moving vehicles into the affected areas as quickly as possible to increase inventory,” says Katie McCall, head of communications for Avis, which is also waiving fees for extended loans, late returns, and one-way trips. Hertz locations in Harvey-hit areas have extended their operating hours.
A rental can only last so long, though, and most Houstonians will be eager to get a permanent replacement for their ruined vehicle. Car dealerships that survived the deluge have already seen a spike in business, but there’s good news for customers too, at least those with means: Auto industry sales surged between 2014 and 2016, and millions of cars leased then are now sitting in used car lots.
“We have plenty of new vehicle supply,” says Jonathan Smoke, chief economist at Cox Automotive. Based on current market offerings, rates of car owners with insurance, and vehicle registration data, he estimates 30 to 40 percent of replacement vehicles will be brand new. Automakers sense a good PR opportunity and a chance to bring new customers into the fold: Both Ford and Volvo, for instance, are offering healthy discounts to Harvey victims.
But some ruined cars won’t be replaced at all—and that’s where Harvey’s impact may prove most devastating. Roughly 15 percent of Texas vehicle owners don’t have any kind of car insurance, despite laws saying they must, according to Hanna, at the Insurance Council of Texas. Of the remaining 85 percent, just three-quarters have comprehensive insurance policies that are sure to cover flood damage. Assuming those percentages apply to the Houston area—and using a lowball estimate of 300,000 destroyed vehicles—that’s 100,000 people who may have to pay for a replacement out of pocket. Many of them may have also lost homes and most of their belongings.
“We’ve increased the number of vulnerable people,” says French, the transportation advocate. “A situation like this sheds a lot of light on the lack of existing infrastructure. It’s difficult to get around when it’s not flooded.” Houston’s public transit agency had half of its bus lines up and running by Friday, and Harvey’s aftermath could provide an impetus for expanded and improved service. But that’s no help to people stuck without cars, living far from bus lines.
And that’s where another specter raises its head: title washing, or taking a damaged vehicle, fixing it up a bit, and fudging the record (either by forgery or taking advantage of legal loopholes by moving states) to hide the fact that it was once the victim of serious problems. A 2014 study by Carfax found there were nearly 800,000 cars on US roads that had been through this sort of fraud; 650,000 of those were flood damaged or salvage vehicles.
Because these cars tend to be sold cheap, their sellers are likely to target the many people now in desperate need of a new chariot. “Flooded vehicles will be showing up on the market,” says Fred Britton, owner of Public Auto Auctions in Niederwald, Texas, near Austin. “That’s always a bad thing.” Cars that have been submerged are almost certain to be totaled: Water can wreak havoc on the engine, exhaust, electrical systems, and computer controls. “Somebody may be able to get it running again,” Britton says, but the problems caused by the water will almost certainly persist and eventually resurface.
And so the pain of the storm could continue to throb long after the water dries up.