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2017-09-05 NABD Survived Hurricane Harvey but Auto Dealers are Still Recovering!

By Kenneth Shilson, CPA

NABD – Founder/President


            NABD is pleased that the devastation of Hurricane Harvey is now in the rear view mirror and that recovery from this disastrous storm is now underway. Thanks to everyone for their kind thoughts and prayers as Houston and Texas travel down the road to recovery! Those who survived and successfully rebounded from Hurricane Katrina understand what is ahead for Texas and particularly for Houston, which is our nation’s fourth largest city!

            The impact on the automotive industry from Hurricane Harvey will be felt for years into the future. Insurance companies are rushing to process an estimated 500,000 Texas vehicles waterlogged during Tropical Storm Harvey’s record rainfall, a catastrophe expected to strain the supply chain for many months. Major dealership groups reopened for business and placed orders for hundreds of vehicles as residents relinquished wreckage and filed claims. State Farm alone reportedly has received more than 27,500 Harvey-related claims from just one county in Houston alone! Shipments to franchise dealers of extra vehicles are en route to Texas and manufacturers expect a frantic next several months.

            The surge in demand will boost retail auto sales which have sputtered for more than a year in the Houston market. However, the impact on the independent subprime auto finance market will be quite different and here is why:

      1.)    Many independent operators have suffered big inventory losses and those vehicles will take considerable time and will be difficult to replace.

      2.)    Subprime customers who lost their vehicles in the raging water have limited financial capacity to replace them.

      3.)    Outstanding subprime finance contracts will default as flooded vehicles stop running without insurance coverage to repair or  replace them.  

      4.)   Months may pass before some operators can reopen their sales and collection operations.

       5.)    Some subprime customers have tragically lost their homes and jobs, and now face an uncertain future which requires them to “start over”.

      6.)    Key employees who survived the flooding must prioritize family needs over jobs.

Despite all the adversity above, both Texas and the subprime auto industry will recover from this horrific tragedy. Operators must now work together to expedite the recovery process and help those dealers who suffered the biggest losses. Here is how everyone can help:

      NIADA in conjunction with the Texas Independent Automobile Dealers Association (TIADA) have formed a relief fund to help any dealership in Texas that was affected by Hurricane Harvey. 100% of all contributions to the NIADA foundation will be donated to those needing relief from flooding, property damage, or other disaster-related needs. NABD supports this relief effort and encourages all members to make donations to this worthy cause. NABD will focus its efforts on relief for BHPH operators who suffered the biggest losses by donating a portion of attendee registrations from its upcoming Conference in Orlando on October 23-25, 2017. For information or to contribute to the NIADA hurricane relief fund, visit or For information on the NABD Conference in Orlando and to register, visit

      The strength and courage of subprime auto dealers in Texas has been tested by the devastation of the largest flood in American history. However, the rain and floods will not wash away their resilience. Let’s all work together to make the recovery time as short as possible. Good luck to all.


NABD will host a BHPH Conference in Orlando on October 23-25, 2017. A portion of the attendee proceeds from this Conference will be donated for BHPH relief to victims of Hurricane Harvey. For information or to register visit, or call (832) 767-4759. NABD is the only used car special interest group exclusively for the BHPH industry. NABD has no membership dues and membership is attained by participating in an NABD training event.