JACKSONVILLE, Fla. – Welcome to car buying in the pandemic era, year two.
From supply chain issues to chip shortages, car makers are still struggling to meet demands. Add the pandemic in the mix and dealerships have learned to become creative when it comes to moving metal.
Whether you’re buying or selling, potential car shoppers have likely never experienced anything like this. I had to buy a new car last year and I can tell you it was an entirely different ball game. While we may be tired of hearing it, the car buying process is a reminder that we are still very much living in unprecedented times.
I spoke with an auto industry expert to find out what you should expect and how to work around some of the issues.
“It is a strange time to be buying a car. That’s the best way to explain it. What would you say to anyone who’s maybe in the market right now?” I asked Peter Leto, the CEO of Foundation Direct, a company that helps automotive dealers drive more revenue through digital advertising.
“Good time to be a dealership. Good time to sell your car. Not an awesome time to have to buy one,” Leto said.
The former Google executive has worked within the auto industry for the last decade and says nothing has compared to what he’s seeing now.
“I know there’s some people who are at home and saying, ‘Hey, we are two years into the pandemic. It had to have gotten better,’ and you’re saying that really isn’t the case?” I asked.
“The truth is as of last month December 2021, dealers have about a third of new car inventory that they had the same time a year ago,” Leto said.
By now you’ve seen the cargo ships stalled at ports across the country, and the ongoing battle to keep up with the microchips needed to build new cars, add that to the high demand and Leto said new vehicle transaction prices and used vehicle transaction prices are essentially at an all-time high.
The auto expert said the good news is the dealers have had time to adjust to these circumstances.
“Connecting with consumers virtually, engaging cars a little bit through technology. Nothing can beat that in-person feel that you get at a dealership or auto shows but I feel like we’ve seen a pivot from both consumers and dealerships of how to aid that car buying process in these challenging times,” Leto said.
And buying a car is no longer limited to what you can find at the dealership down the road. In fact, Leto said 61% of in-market shoppers are willing to drive over 50 miles for a vehicle and potentially even further for a good deal.
Be open to doing these deals through Zoom and Facetime, because you might get a better deal in a different zip code.
“The one thing that I can say that I think everybody is grateful for is the ability to interact with dealerships and experience cars online, more so than having to go to the physical dealership themselves,” Leto said.
But with used car prices at record highs, and inventory so low, you’re going to have to do some extra work to find a good price.
Leto warned: “I don’t know about you, but I used to say, ‘Oh, my lease is up next month,’ and go to a dealership four weeks in advance. That’s not going to fly anymore.”
He also advised if you are looking for a certain brand or car: “My advice to a consumer is have that flexibility if you can. Get ahead of it and if you can’t be more willing to put more time into the research or to go a little bit further or to consider a brand you haven’t considered before because that’s the best way you’ll be able to get what you want more quickly.”
While finding a deal right now is tough, take advantage of trade-ins. Leto said you might be shocked to find out how much the car already sitting in your garage is worth.