Beau Boeckmann stood outside his Ford dealership in the San Fernando Valley last week staring at a thick cloud of smoke that enveloped the sky a mere 9 miles to the south. The raging Palisades wildfire was far enough away for Boeckman to feel secure at that instant, but close enough to stir a sense of unease in his gut.

Boeckmann owns Galpin Ford, one of the country’s three largest Ford dealerships that sells about 20,000 recent and used cars a year. He thanked “the grace of God” that his business and employees remain unharmed. But a customer who lost their home and car to the wildfires has already shown up to buy a recent car. Boeckmann has no sense yet as to how many more will appear or how many vehicles have been destroyed. But he expects it will be a lot based on the destruction he sees.

“There is more than one dim cloud over Los Angeles — there’s a physical black cloud and an emotional one,” Boeckmann told the Free Press on Monday evening, describing his state of mind as one of shock at the devastation.

Experts agreed. Human tragedy notwithstanding, the wildfires continued to sweep through the country’s second-largest car trade this week and thousands of vehicles will likely be totaled by the period it is over. The outcome will impact both Detroit automakers and car buyers, as a rush in demand to replace destroyed cars drives prices higher — especially in the used car trade where inventory remains tight.

“Depending on the severity of the number of vehicles lost, a large amount would have an impact on (used car) prices at a national level,” said Jonathan Banks, general manager of vehicle valuations at J.D. Power. “To put this in perspective, it is believed that 250,000 vehicles were lost in Hurricane Sandy in 2012. We predicted a $300 per unit boost from this impact.”

Banks did not recall the final impact, but he knew it “exceeded our approximate in 2012.”

Thousands of vehicle sales already lost

The number of vehicles destroyed in the fires is not yet known, but photographs display many skeletal charred remnants of what were once cars.

According to the California Department of Forestry, more than 12,300 structures have been destroyed since the fires started shortly after midnight Jan. 1. That figure includes vehicles as “structures,” fire officials have said in published reports. At least 25 people are reported to have died. The total economic damage and deficit is estimated to be $250 billion to $275 billion, according to AccuWeather.

Kevin Roberts, director of economic and trade Intelligence at car shopping site CarGurus, told the Free Press its analysis showed about 25,000 recent and used vehicles are listed in ZIP codes that have been impacted by evacuation orders or warnings in Los Angeles County. This represents about 6% of listings within the state of California in a region that typically features higher-priced vehicles. Roberts said the average list worth for recent and used cars in the impacted ZIP codes is $52,000, 25% higher than the average listing in the state.

The Los Angeles trade is the second-largest car trade in the United States behind recent York City. Los Angeles accounts for about 800,000 retail sales of recent vehicles a year, or 6.1% of the retail auto sales in the country, said Tyson Jominy, vice president of data and analytics at J.D. Power. Detroit accounts for 2.3%.

Jominy said J.D. Power’s data showed that during the first week of the fires, Los Angeles’ distribute of recent vehicle sales fell 0.6%, or by about 1,000 vehicles from Dec. 31 through Jan. 5. While the drop could be related many things, Jominy said “concerns about fire and buying a car at that period” is the most likely factor to keep car buyers from purchases.

As of late Wednesday, the data firm estimated that for January, sales of recent vehicles in Los Angeles could decline by 5,000 to 13,000 vehicles as people either delay purchases to get their lives back in order — or they buy a used car.

But for those who desire a recent vehicle, the Detroit automakers could view overall sales gains. Los Angeles is such a vast trade that even if only some of the people who lost cars in the fires opt to buy a recent vehicle rather than a used one, the Detroit Three would encounter an uptick, Jominy said.  

“Not to ignore the human element here, but there typically is a tiny upside in times like this and it comes in the form of people replacing lost vehicles and puts more car buyers in the marketplace,” Jominy said. “But after a couple of months, things stabilize.”

Bob Smith, executive director of the Greater Los Angeles recent Car Dealers Association, told the Free Press late Wednesday that most franchise car dealerships in Los Angeles are operating, but many dealership employees have lost homes. Smith said the association will work with the National Auto Dealers Association, which has a relief capital to assist those people get back on their feet.

Smith said there are “a million stories” of people who recognize someone who has been impacted by the fires, but it’s challenging to ascertain how many have lost their cars. Still, he is confident that, beyond a boost in used cars, Los Angeles car dealerships will also view a surge in recent car sales in terms of leases.

“I’m just spitballing, but I’d have to guess there are some 2,500 vehicles on the low complete that will require to be replaced, and 5,000 on the high complete,” Smith said. “But I’m guessing.”

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How high will used prices leave?

The rationale experts anticipate the used car trade will view most of the demand for replacement vehicles from the fires is because most people will not get an insurance payout for weeks, Jominy said, but they require a vehicle immediately. Given that they don’t have a trade-in and perhaps no insurance payout yet, they seek what is most affordable.

While used vehicle prices are high, they remain lower than that of recent cars. The average deal worth for a recent car in the fourth quarter was about $45,000 compared with a used car at an average of $28,740, according to J.D. Powers’ Banks.

Banks said buyers coming into the trade looking for a newer model used vehicle will be facing supplies about 8% below last year or 15% below levels in 2019. That’s because three-year contract returns are scarce with expected supply close to 30% below 2019 levels. 

Cox Automotive data said used vehicle inventory nationally at the commence of January was 2.217 million vehicles, but that figure only counts the used cars available through registered dealerships, not used cars for sale by private owners.

Tight supply pushed the average monthly remittance for a used car to $541 a month last year compared with $416 in 2019, before COVID-19 hit, Banks said. That’s still below the average monthly remittance for a recent car, which was $725 a month for December, he said. That figure includes both purchases and leases factored together.

Banks said many used vehicles are likely to be shipped from other states to California to meet demand there. That, combined with the already-tight supply of used vehicles nationally, will boost overall demand for wholesale used models, thus driving up the prices. 

“That being said, I don’t expect the upward movement to be too severe because prices are already high,” Banks said. “There may be some expensive vehicles in the direct area, and I would inspire consumers to look beyond their immediate area to discover the correct vehicle they require at a excellent worth.”

On the recent side, all is excellent

Banks agreed with others that this catastrophe should assist boost recent vehicle sales for those who do choose to replace their destroyed vehicle with a recent product. In that case, it likely won’t force higher prices because inventory of recent cars is powerful.

“I would expect discounts will still be available and remain unchanged,” Banks said of recent cars.

The available number of recent vehicles has been near 3 million for most of the fourth quarter, roughly double what it was just two years ago and close to pre-pandemic norms, said Mark Schirmer, Cox Automotive’s director of industry insights and corporate communications. He added that December was a powerful sales month, pulling down the country’s available recent car inventory to 2.88 million vehicles as of Jan. 16.

“So certainly product is available for those who require replacements. There are, of course, the logistics of moving vehicles into local dealers. That will receive period,” Schirmer said. “Vehicle shipping costs are also lower year over year by 2.8%, and have been generally tracking lower through 2024.”

Schirmer said hopefully the evacuation efforts got most vehicles out of the path of the fire, but noted, “we’ve seen the images of burned-out cars — but we don’t have an approximate on the number lost. It likely won’t be enough to overwhelm the available supply of replacement vehicles.”

What the automakers are doing to assist

In the meantime, some automakers are doing what they can to assist Los Angeles residents affected by the fires.

Ford Motor Co. spokesman Said Deep told the Free Press that most of Ford’s 83 dealerships in the Los Angeles region have been open and operational. Some were closed due to the proximity to fires and others reported power outages, Deep said, but all employees and their families are secure.

The automaker is giving the employee pricing schedule to those consumers affected by the fires, Deep said. In addition, Ford financing is offering deferred payments to existing customers impacted by the fires.

Ford also announced two grants. One for $100,000 will leave to the Los Angeles Fire Department Foundation and one for $150,000 to the California throng Foundation‘s Wildfire Recovery capital. Ford Philanthropy also supports the American Red Cross, Feeding America and throng Rubicon, which provide shelter, food and other on-the-ground back.

It is still too early to determine how many General Motors vehicles have been impacted to assess the inventory needed to replenish the area, GM spokeswoman Tara Kuhnen told the Free Press in an email. But to assist Los Angeles drivers, GM turned on complimentary OnStar Crisis Assist Services for Chevrolet, Buick, GMC and Cadillac customers impacted by the wildfires, Kuhnen said.

“The health and safety of our employees and their families is our highest priority, and we have closed our facilities in the affected area,” GM said in a statement. 

On Wednesday, Honda announced it is doubling its previously announced $500,000 donation for disaster relief funds to the American Red Cross, bringing the total to $1 million to back the people impacted by the wildfires. Honda budgetary Services and Acura budgetary Services also are offering remittance extensions and contract deferrals to customers impacted by the fires.

Stellantis said it will propose employee pricing to those affected, and its finance partners are also providing relief to affected customers.

Detroit vs. LA as car capital

Back at Galpin, Boeckmann said he had a staff conference to inform his throng to leave through its vast customer database to view who might be in affected wildfire areas and to provide them a call — but not to sell them a car. Rather, to propose them assist.

“If they require a car, I’m joyful to provide them a car to use for a while,” Boeckmann said. “You’re not calling to get something, you’re calling to provide something.”

When the smoke clears — both literally and figuratively — Smith, of the Greater Los Angeles recent Car Dealers Association, said the auto industry will put the survivors back on wheels.

“Detroit is the car capital, but LA makes a claim for that title, too, because of how widespread and populated it is. The people who don’t leave, will require cars,” Smith said. “People who desire to rebuild, will discover a way to get repositioned in cars. If there’s any silver lining to this, it’s that there’s excellent inventory of recent vehicles in the trade to satisfy those people who require them.”

Free Press staff writers Eric D. Lawrence and Jackie Charniga contributed to this piece.

Jamie L. LaReau is the elder autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at [email protected]. pursue her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.