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I live in a city with big, annual summer hail stones. Many dealerships have built canopies and it seems to be working. I also have friends in the auto industr
by giarc 7y ago
I live in a city with big, annual summer hail stones. Many dealerships have built canopies and it seems to be working.
I also have friends in the auto industry and the interesting thing is they said hail isn't the worst thing, they actually profit quite a bit. Basically insurance will appraise the new value of each car and write a cheque (ex. $10k for each car). The dealership can still sell the car as "hail damaged" and offer the buyer a $5k discount. Buyer thinks they are getting a great deal, the car just has some dimples, but $5k is $5k right. The deal then makes an additional $5k off the car. However this breaks down if hail insurance premiums are going up.
- travmatt 7y agoDealers can take the money, fix the damage and still sell the car as brand new - if it hasn’t been titled yet, body work doesn’t need to be disclosed to the buyer. Dealers usually have in house body shops or relationships with body shops and pay labor + supplies in the repairs. A bigger issue is the backlog of work that quickly accumulates in the aftermath of a hailstorm.
- pfranz 7y agoI imagine "the market" would correct for that profit. The $10k for each car comes from their insurance premiums. If they don't need the full payout, it make sense to want to pay less in premiums.