Mark Scheinberg, president of the Greater New York Automobile Dealers Association told NADA Used Car Guide that “some big issues right now revolve around insurance,” for dealers in areas damaged by Sandy.
“Flood insurance was not available for most of the coastal property, so damage to property is on the dealer,” Scheinberg said.
He also noted that FEMA does not help with business losses, so dealers must deal with storm impact on their own.
The Greater New York Automobile Dealers Association has contributed $250,000 on top of the $1M provided by NADA to the Emergency Relief Fund of the National Automobile Dealer’s Charitable Foundation.
Approximately 340 dealers in New York were affected, and about 25 percent still have issues, either with phone lines, power, or Internet (as of Nov. 8), officials shared. And it isn’t just physical damage they are worried about.
“Many dealers’ insurance plans do not cover for losses from losing business days. This is a challenge since about 85 percent of dealers service employees are union and are guaranteed a 30 hour minimum work week,” Scheinberg told NADA UCG.
As for the vehicles themselves, thankfully, Scheinberg explained that many new vehicles are covered by floorplan insurance, so many dealers are “not on the hook” for damaged vehicles.
“There were a lot of units lost because any salt water damage on vehicles results in a salvage situation. Also, since dealers don’t have much real estate, many vehicles were stored on piers and in other areas near the coast,” Scheinberg explained.
Penske Motor Group’s 36 dealerships along the eastern United States were impacted by the storm and lost, on average, three to four days of business, with the dealerships in the New York metropolitan area suffering a more prolonged impact.
The most severe damage was felt in Jersey City, NJ, where three of the company’s dealerships sustained damage from flooding, including the loss of approximately 1,000 new and used vehicles which were in inventory.
Power was restored to those dealerships on Nov. 6, and the dealerships have re-opened for business.