As Hurricane Milton bore down on Florida, it was still sunny at Steve Gibson’s house in Satellite Beach, a barrier island on the east side of the Florida peninsula. And when it’s sunny, dealers want to sell cars, says Gibson, retired past president of Dealer Risk Services, a Florida-based dealership insurance company.
Gibson hopes, however, that dealers have already taken measures to make it through the natural disaster headed their way and that they will rebound once it has passed.
“The challenge is getting (dealers) to react when they still have time,” he says. “Hurricanes move. You still have to ignore the two, three, or four sales you might get by staying open and do the prudent things to protect the most valuable assets you have, which are the inventory and the facility.”
As Florida braces for its second hurricane in as many weeks, there are actions dealerships should have taken weeks ago to help them weather the storms, as well as actions in the present that will help them recover.
Having a disaster preparedness plan is crucial, says Gibson. Being ready for a hurricane isn’t a spur-of-the-moment thing.
“We tell (dealers) it requires a year-round awareness, and certainly beginning with late spring and early summer, that is the time to start preparing and making sure everyone is fully cognizant of what they need to do” when a hurricane is approaching, says Gibson.
Having a ready location on higher ground for relocating inventory is crucial, he says. That could be the higher floors in a parking garage or open land in a higher location. Many Florida dealers already lease such locations to store inventory during hurricanes, says Gibson.
Allot enough time to move the inventory, he recommends, because “it takes time to move 200 cars, and your employees want to get the heck out of town.”
Even if your inventory is covered by insurance, losing it could still cost a sizable amount, cautions Gibson.
“With most of the inventory policies, the deductible is per vehicle,” he says. “If all your inventory is affected, you could have a sizable deductible.”
To protect the facility, dealers should do obvious things such as board up windows, if possible, and use hurricane shutters.
They should also make sure all the trees near the building are properly trimmed and ensure all the storm drains are unclogged so the water can run off properly, says Gibson.
If a dealership has electric vehicles in its inventory, it should make sure all are fully charged, recommends Sam Abuelsamid, principal analyst, transportation and mobility, Navigant Insights.
If they have bi-directional charging, those vehicles can be used as backup power to help a business operate after a storm, he says.
The vice president of Hertz rental cars was on a panel he moderated a few days before Helene hit Florida, says Abuelsamid, “and she said that they were making sure that the electric trucks they had in stock were charged and in position to provide backup power for gates and other systems so that they could get rental cars in and out.”
Check Insurance Terms
Dealers should check their insurance policies to see exactly what they are covered for, advises Ken Rosenfield, founder and partner at Rosenfield & Co., an accounting firm with offices in Florida and New York. Rosenfield has some five dozen dealerships and dealership groups as clients.
He recommends negotiating with insurance companies to cover lost profits going forward for Florida. Rosenfield & Co. learned that in 2004, four hurricanes hit the state in six weeks, starting in August.
The insurance company wanted to look at lost profits from those months, but in Florida those are the least busy months for dealerships because the “snowbirds” – seasonal residents from northern areas of the U.S. – aren’t in Florida yet.
“We came up with a system to assess profits when (dealerships) are busiest,” says Rosenfield.
Dealerships, especially those with collision centers, should order replacement parts well ahead of time, says Rosenfield, including the most popular paint color, sheet metal, floor carpets, dryers and the like.
He adds that one of his bigger clients in Sarasota has a mobile repair truck that is fully stocked with tires and other parts to assist emergency vehicles.
Look After People First
All those steps are important, but a dealership’s first thought should be its staff.
“It’s all about your employees and making sure everyone is safe,” says Linda Barnette, a managing partner at Technical Automotive Construction Advisors (TACA), dealer advocates that aid dealerships in designing and building facilities.
That includes making sure employees can find safe ground or helping them find it, she says.
A Rosenfield & Co. dealership client provided sandbags to its employees and a truck to transport those sandbags if the employees didn’t have one. The client had food trucks at the dealership with cooked food the employees could take home, says Rosenfield. It also helped employees evacuate if necessary.
“That builds a lot of loyalty,” he says.
Be Prepared for the Aftermath
Helping customers and employees in the aftermath of a storm is also important.
Even if a dealership isn’t able to help a customer, they should be ready to refer that customer to a dealership that can help them, says Barnette.
That helpfulness should extend to the dealership’s community.
“Dealerships will help the community in any way they can,” she says, “anything we can do to make sure our customers are taken care of.”
A dealership’s disaster preparedness plan should include a phone chain for everyone in the dealership to ensure their homes and families are safe when the storm passes, says Gibson.
Staffing may be challenging after the hurricane because people can often be displaced, he says. Employees may have to evacuate to, say, Georgia, which can be an hours-long drive away. Staffers “are not going to walk back into the dealership the following day,” Gibson says.
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