The weather-related developments connected to the used-vehicle industry arise seemingly by the day now that it’s near the height of hurricane season.
While the National Auto Auction Association Standards Committee made an adjustment to the NAAA arbitration policy, Group 1 Automotive described what shape that dealer group finds itself in the aftermath of Hurricane Harvey.
Meanwhile, Texas Automobile Dealers Association president Bill Wolters reiterated the urgent need to help dealerships and their employees impacted by flooding.
And now, Hurricane Irma is churning through the Caribbean as one of the strongest storms ever observed by federal officials with the possibility of it striking Florida and other parts of the Southeast in the coming days.
NAAA on flood damage disclosure
According to a statement sent during Labor Day weekend, NAAA officials explained that currently, a flood damage disclosure (from sellers to buyers) was only required for vehicles selling under the following sale light combinations:
• Green light only
• Green/yellow light
• Yellow light only
For vehicles sold under the red light a disclosure was not required. But effective on Tuesday until further notice, NAAA indicated sellers will now be responsible for any/all flood damage disclosures to buyers when selling regardless of sale light, which includes the red light.
Officials also said the time period for flood damage via auction inspection is now extended from the “B & C” to “30 days from sale date.” They added the time period for flood damage via DMV and/or insurance company records will remain the same at “120 days.”
“The NAAA Standards Committee strongly urges all selling and buying clients to inspect the vehicles prior to the transaction to avoid arbitration issues,” officials said. “See NAAA.com’s reference page for flood damage inspection best practices.”
NADA Foundation still in need
While some dealers might be looking for inventory, of immediate concern in some portions of the Lone Star State centered on what was shared by Wolters, who implored the industry to give to the NADA Foundation’s Emergency Relief Fund.
“NADA created the Emergency Relief Fund to give immediate funds to these employees to help them bridge the gap until they can get their lives back together," said Wolters, who represents 1,300 franchised dealerships in Texas, in a news release. "We need those thousands of dealerships across the country to pull together to help these dealership employees get back on their feet. We really, really need everyone to step up and help us get through this.”
The National Automobile Dealers Association elaborated more about the situation
The NADA Foundation is calling on dealers, dealer association groups and others to its Emergency Relief Fund, which is dedicated exclusively to providing financial assistance to dealership employees.
Dealership employees who sustained personal property damage caused by the hurricane and flooding .
Since 1992, the NADA Foundation’s Emergency Relief Fund has provided more than $6 million to 9,200 dealership employees and their families across the country.
For more information, call (703) 821-7102.
Update from Group 1
Over at Group 1, leadership maintained that the company’s top priority is supporting its nearly 3,000 employees in the greater Houston and Beaumont areas of Texas.
Executives acknowledged that approximately 500 of their associates suffered significant property losses from flooding and storm damage. The company is assisting these employees by providing disaster pay and further financial support from the Group 1 Foundation.
Despite damage to some facilities and inventory due to record-breaking flooding in the region, Group 1 determined that preliminary assessments indicate all facilities are intact and fully operational. Group 1’s Houston stores reopened last Wednesday. The company’s Beaumont stores reopened on Thursday.
The dealer group said total damages associated with the storm are estimated at approximately $15 million. This amount includes insurance deductibles for damaged inventory and facilities, disaster pay for employees, and financial support for team members whose homes flooded.
“Our top priority is supporting our employees in the areas affected by Hurricane Harvey. The size and scope of this disaster is almost beyond comprehension and the losses many of our employees and their family members have suffered is staggering. Our hearts go out to all of those affected by this devastating storm,” Group 1 president and chief executive officer Earl Hesterberg said in a news release.
“Beyond helping our employees, we are also moving quickly to get our stores fully online to support the community’s needs for replacement vehicles,” Hesterberg continued. “Through some extraordinary efforts by our team, we have all of our stores in both Houston and Beaumont open. And while we did sustain some inventory losses, given that we have over 15,000 units in stock in the impacted area, we are proud of the proactive efforts taken by our dealership teams that greatly protected our new and used inventory. Their actions preserved over 98 percent of our available inventory, which allows us to rapidly assist customers in need of replacement vehicles and service.
“The company’s third quarter results will be impacted by both the non-recurring costs highlighted above, as well the impact of the business disruption for an entire week across the Houston region, which represents Group 1’s largest revenue-generating market,” he went on to say.
As Texas tries to recover from Harvey, Florida already declared a state of emergency because of Irma, which on Tuesday afternoon was classified as a Category 5 storm with sustained winds of 185mph.
Irma is approaching the strongest storm readings ever recorded by federal officials, which determined Hurricane Allen topped out at 190mph in 1980 as it swept through the Caribbean and Gulf of Mexico before colliding with south Texas.
With places like Puerto Rico already squarely in Irma’s path, officials in the Sunshine State mobilized its National Guard as all 7,000 Florida members will be reporting for duty on Friday morning. The state is also leveraging its connection to regional guard resources where another 30,000 troops, 4,000 trucks and 100 helicopters could be made available, if needed, according to a news release issued by the office of Gov. Rick Scott.
“With Hurricane Irma now a Category 5 storm, we must do all we can to prepare our families and communities for any potential impact from this major weather event,” Scott said. “We do not know the exact path of this storm, but weather can change in an instant and while we hope for the best, we must prepare for the worst.”
Editor's Note: Video in window above courtesy of NADA.