Price of new, used cars tipped to surge
Thousands of Aucklanders’ cars are being written off after being submerged in flooding.
AA Insurance has had 1200 vehicle claims, and had so far written off 300 cars, acting chief executive Simon Hobbs said.
But many of the other claims would lead to cars being written off too. ‘‘If the water has got into the car, it’s a simple write-off,’’ Hobbs explained.
That was because water wrecked cars’ electronics.
‘‘Once it gets wet, it might work for a while, but you don’t know when it will stop working,’’ Hobbs said.
‘‘The last thing you need is for your safety features not to work when they are needed, or your car simply to stop working when you are halfway down the motorway.’’
AA Insurance was going as fast as it could assessing cars because it was trying to get money to its policyholders as quickly as possible, in anticipation of a surge in demand for new and used vehicles. This could
result in prices rising.
‘‘One of the important things at the moment is to process as many of these claims as quickly as we can because we know there’s a limit of new and secondhand vehicles in New Zealand,’’ he said.
‘‘Supply chain stuff is going to be a real challenge in the next six months, to get a stock of vehicles into New Zealand to replace all these that are being written off.’’
Over the past 12 months, secondhand vehicle prices had been rising as demand had outstripped supply, he said.
When a car is written off by an insurer, it is deregistered and logged as written off on the Motor Vehicle Register.
The register shows dozens of vehicles, including a Harley Davidson motorbike and several Ford Rangers, were written off for flood damage yesterday.
Hobbs said once cars were deregistered, they were sold at damaged vehicle auctions held by the two large rival car auction companies, Turners and Manheim.
AA Insurance paid for them to be removed to Turners and Manheim’s yards, but such was the scale of the claims, both Turners and Manheim had secured new temporary storage sites to handle the large number of vehicles.
At auction, written-off cars are sold to dismantlers, and scrapmetal merchants, Hobbs said.
Useful parts are stripped from vehicles, with scrap metal and some components exported. Other parts are used to repair vehicles in this country.
Manheim had set up a temporary storage location in south Auckland with the capacity to hold 400 to 500 vehicles.
It had additional sites on standby depending on demand, Andy Cox, Manheim’s NZ sales manager for salvage, told the Autotalk news service.