JACKSONVILLE, Florida. – Welcome to Car Buying in the Age of the Pandemic, Grade Two.
From supply chain issues to chip shortages, automakers are still struggling to keep up with demand. Add the pandemic into the mix, and dealers have learned to get creative when it comes to moving metal.
Whether you’re buying or selling, potential car buyers have probably never experienced anything like this. I had to buy a new car last year and I can tell you that was a whole different ballgame. Although we are tired of hearing it, the car buying process reminds us that we are still living in unprecedented times.
I spoke with an auto industry expert to find out what to expect and how to work around some of the issues.
“It’s a strange time to buy a car. That’s the best way to explain it. What would you say to someone who might be in the market right now? I asked Peter Leto, CEO of Foundation Direct, a company that helps car dealerships generate more revenue through digital advertising.
“Good time to be a dealership. Good time to sell your car. Not a great time to buy one,” Leto said.
The former Google executive has worked in the automotive industry for the past decade and says nothing compares to what he sees now.
“I know there are people who are at home and say, ‘Hey, we’re two years into the pandemic. It must have gotten better,” and you’re saying it really isn’t? ” I asked.
“The truth is that as of the last month of December 2021, dealerships have about a third of the new car inventory they had this time a year ago,” Leto said.
By now you’ve seen freighters stranded in 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 transaction prices on new vehicles and used vehicle transaction prices are essentially at an all-time high.
The car expert said the good news is that dealers have had time to adapt to these circumstances.
“Connecting with consumers virtually, engaging the cars a bit through technology. Nothing can beat that in-person feeling you get at a dealership or at car shows, but I feel like we’ve seen a pivot from consumers and dealers on how to help this car buying process during these challenging times,” Leto said.
And buying a car is no longer limited to what you can find at the dealership around the corner. In fact, Leto said 61% of in-market buyers are willing to go more than 50 miles for a vehicle and potentially even further for a bargain.
Be open to these offers via Zoom and Facetime, as you might get a better deal in a different zip code.
“The one thing I can say that I think everyone is grateful for is the ability to interact with dealerships and experience cars online, more than having to drive themselves to the physical dealer,” 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 ends next month’ and go to a dealership four weeks in advance. It won’t fly anymore.
He also advised if you’re looking for a certain brand or car: “My advice to a consumer is to have that flexibility if you can. Get ahead and if you can’t be more willing to spend more time researching or going a little deeper or considering a brand you haven’t considered before because that’s the best way get what you want faster.
Although it’s hard to come to an agreement right now, enjoy the exchanges. Leto said you might be shocked to find out how much the car already in your garage is worth.
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