After flood, Texans want to get back in driver’s seat
With the floodwater of Hurricane Harvey receding in southeast Texas, residents are reclaiming their homes, securing food and water — and looking to get back in the driver’s seat.
Hundreds of thousands of cars and trucks in the region have been damaged or destroyed by flooding. Dealerships are reopening for sales and service, and carmakers are reallocating cars and trucks to the region.
But in the meantime, car rental companies can’t keep up with demand. And it will be weeks before things start returning to normal. With Hurricane Irma bearing down on South Florida this weekend, the logistics become even more complicated.
In the Texas region hit by Harvey, where estimates of cars lost to water damage range between 200,000 vehicles to as many as 1 million, the crush is already on.
The scale of the problem varies from automaker to automaker and from dealership to dealership.
W. Carroll Smith, president of Monument Chevrolet in Pasadena, Texas, said Harvey spared his dealership, but he knows of counterparts in the Houston area that were badly damaged by flood waters.
“I was fortunate at my dealership that we didn’t have any flooding or loss of inventory,” he said. “I’m on my way to a Ford dealership that’s totally underwater.”
Smith said General Motors Co. has offered additional inventory to Houston-area dealers, but he said the help is not coming immediately.
“We have been able to have additional inventory, but in the course of normal production, so it’s not going to be overnight,” he said. “That’s an eight-week thing.”
He added that he has seen an increase in the number of drivers who are buying cars without trading in older models. “I’m anticipating that’s because they have a total or some owners have not settled insurance claims yet and they’re not in a position to buy,” he said.
Smith said auto lenders have been lenient with drivers who have loans on cars that may have been damaged. “In many cases, they would not finance two cars for somebody until they pay off the first one, but they’re doing it,” he said. “That’s helping with our industry’s recovery.”
GM spokesman Jim Cain estimated a few thousand of the company’s new vehicles were damaged on dealer lots. He said most dealers had minor problems such as leaky roofs or damaged signs. By the end of last week most had reopened, though he said a small number suffered “catastrophic” damage to facilities and inventory.
The automaker is moving used-vehicle inventory to dealerships as rental and loaner cars. At the same time, GM is expediting delivery of parts such as batteries, engines and transmissions to its dealers.
Ford Motor Co. has had representatives from its finance arm, Ford Credit, on the ground in Houston to assess damages to dealerships. Most dealers finance through Ford Credit, said Mark LaNeve, Ford vice president of U.S. marketing, sales and service.
Around 80 percent of Ford dealers in the path of the story sustained some damage to either vehicle inventory or buildings, LaNeve said.
Ford estimates it lost vehicles in “the low thousands,” which was less than expected. LaNeve said Ford will prioritize production for Texas and divert some used-car inventory from regional dealers nearby.
“We’re working really hard to get the dealers back on board,” he said.
A Fiat Chrysler Automobiles NV spokesman said hard numbers on vehicles lost are not yet available, but said only a few of its dealerships reported that their inventory was completely flooded. The company said it is securing incremental inventory for southeast Texas. “At the plants, this includes prioritizing orders from dealers in the affected areas,” Fiat Chrysler said.
Perhaps as important to those hit hardest by the hurricane, dealers and automakers are creating financial assistance packages targeted to the region.
GM’s four brand websites include information on how to secure loaner vehicles while a car is being repaired. The company is offering $1,000 in extra new-vehicle replacement assistance through Oct. 2 on top of other incentives. Eligible customers who replace a vehicle could qualify for a 90-day deferred initial payment. GM Financial also is waiving certain fees,
Ford has put together something it calls the “Texas is Family” customer-assistance bundle. It includes “no-haggle” pricing at the same level enjoyed by Ford employees and family members, no payments required until 2018 and a simplified online application process.
Fiat Chrysler has launched its Southwest Business Center Disaster Relief Employee Purchase Program, an incentive package available to residents in specific areas of Texas and Louisiana. With a copy of insurance claims for damaged vehicles, residents can become eligible.
New vehicle stock and affordability is only part of the current problem. While dealerships are still assessing both property damage and inventory loss, rental car offices are reporting overwhelming requests.
Enterprise Holdings operates not only its namesake rental company, but also National and Alamo. A company official said Thursday that despite the issues still plaguing Texas, Enterprise was beginning to shift some resources to Florida in anticipation of Irma’s arrival.
One person looking to rent a car near the Texas coast told the Associated Press he was informed there were 2,500 people already on a waiting list.
In Port Arthur, about 70 miles east of Houston, resident Cesar Garcia said: “I tried renting a car and none of those places said there was availability from here to Houston. I was told ‘good luck.’ Nothing.”
Staff Writers Melissa Burden and Ian Thibodeau contributed.