The auto industry is just one of many fields dealing with coronavirus-related setbacks, and a new issue could have far-reaching implications for more than just car companies and manufacturers.
Because fewer and fewer people are interested in buying cars during the current pandemic, more and more cars are left to pile up unsold.
Used car auctions have essentially shut down, and their lots are filled with cars and no buyers, which means that prices will plummet.
But what does this mean for people looking to replace a vehicle that was totaled in an accident?
Will cars become more accessible, or will insurance companies try to use this crisis as a way to complicate property damage claims?
What’s happening in the industry?
In addition to factory shutdowns and a lack of auto sales nationwide, the auto industry is now facing an issue with used cars, as well.
Americans seem disinterested in buying cars of any kind right now — and understandably so, with 33 million Americans applying for unemployment since the pandemic began. Industry observers are concerned about the possibility of Hertz taking bankruptcy, as the decline in travel has disrupted the rental car industry. If Hertz does file bankruptcy, its inventory of 500,000 vehicles could flood the used car market.
But this disinterest also includes a lower demand for used cars, and used car auctions have all but shut down. An imbalance of incoming new cars and no buyers will surely cause used car prices to plummet, which could be catastrophic for auto manufacturers and their lending companies.
And experts predict that this issue is not going to be resolved any time soon.
But is this bad news if you’re trying to buy a used car?
What’s bad for auto manufacturers and lending companies is not necessarily bad for their customers.
At the end of March, used-car sales reportedly fell 64%, and used car prices have fallen about 10%, as well.
In fact, anyone who’s been a victim of an auto accident and needs a new car may rejoice at these numbers — at least until they start dealing with property damage claims.
That’s because insurance companies may use these new prices to complicate these types of claims.
Insurers may attempt to push the envelope on write-downs of damaged vehicles and diminished value appraisals in light of the car-price collapse.
Many consumers are not anticipating this type of change, which may lead to more complex property damage claims down the road.
How Pierce & Shows can help
Our Baton Rouge-based firm has established a reputation for providing trusted, dependable legal representation for individuals dealing with motor vehicle accident injury cases.
We understand the complexities of dealing with insurance companies because our car accident lawyers deal with serious motor vehicle accidents every single day.
In many cases, the insurance company for the driver who caused your crash should compensate you for everything, but many insurance companies do everything they can to avoid paying accident victims the money they deserve after their crash.
That’s why this dip in auto sales and, therefore, auto prices could complicate how insurers react to these types of claims.Contact us at Pierce & Shows as soon as possible so we can help you through this difficult time and fight to get you the compensation you deserve.
