Inventory problems have led to higher prices across the board for used cars, while new cars are simply hard to come by as new stock remains low. This has caused some dealerships to change how they run on a daily basis.
Many new cars are fully reserved before they even hit the lot, which means as soon as a shipment comes in, they’re gone.
Low Supply, High Demand
Many car dealerships are now in a position where the arrival of new inventory doesn’t last long. In fact, many customers are putting deposits on arriving new vehicles well in advance. This means that showroom traffic for browsing customers has gone way down. Buyers are signing papers and putting deposits down before the new vehicles even arrive. If you’re a prospective car shopper, there are a few things to keep in mind if you’re determined to park a new vehicle in your garage this year.
The first thing to know is that prices in the used car market are way up to the tune of about 45% higher than the previous year. The demand for used vehicles is also just as high as the demand for new vehicles, and perhaps higher. New car prices are up about 5% and inventory levels are low. This means that you’ll need to be very flexible on things like color, model, and trim if you’re looking for a new car.
Several combining factors are fueling the low supply and high prices in the car market. One major reason is the semiconductor chip shortage. This is having the largest effect on new car inventory. Automakers are dealing with this in different ways. For example, GM has removed some modern tech features in certain models such as automatic start-stop systems. Another problem is that rental car companies sold off large amounts of stock in 2020 to stay afloat. These companies are now aggressively looking to buy new cars while holding onto their old cars. This further taxes both the used and new car markets.
For many dealerships, their previous usual inventory of 600 to 700 vehicles in stock has dwindled to less than 100. When new vehicles arrive, they go quickly due to customer waiting lists. That’s why, as a buyer, it’s important to keep in touch with your local car dealership so that you can get on waiting lists early.
New Vehicles With More Inventory
Some new vehicles are doing better in the inventory situation than others. If you’re looking for a new car, you might consider some of the following models where inventory isn’t as bad as others:
- Honda HR-V
- Honda CR-V
- Jeep Grand Cherokee
- Kia Forte
- Toyota Camry
- Toyota Sienna
- Jeep Gladiator
- Ford F-150
- BMW 3-Series
- BMW X3
- Ford Mustang Mach-E
As mentioned earlier, it’s best to be flexible on trims and colors as well as the models themselves. It is possible to get into a new vehicle this year, but you may have to be willing to do more legwork than just showing up at a local car dealership.
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