MINNEAPOLIS – Almost three years after the pandemic, a leading industry is still trying to get back into shape.
The auto sales market overcame many challenges in this period, most notably inventory.
So what do you need to know if you are planning to buy a car? good question Jeff Wagner learned how clients can better prepare and embrace what may be a new normal.
Sarah Anderson has a goal for her future journey, but it’s not really a demand.
“I’m not particularly picky. I just want a car that meets my general needs,” Anderson said.
It’s a mindset Scott Lambert hopes other customers share. He is president of the Minnesota Automobile Dealers Association.
“What I say to everybody is don’t be as picky as you might normally be. We’re still in pandemic mode. Inventories are still very, very low,” Lambert said.
But they have improved a bit. More cars in the showroom and on the lot prove it. It’s not because more cars are being made and there’s still a shortage of computer chips, but there are fewer customers buying right now and a drop in demand has created an increase in supply.
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Before the pandemic, dealers had approximately 90 days of inventory.
“I don’t know if we’ll ever get back to 90 days, frankly,” Lambert said.
It pretty much went down to zero once COVID hit.
“Now the dealers are telling me we’re down to 15 days of inventory,” he said.
So are there still deals for those in the market for a new car?
“There is still cheap money available, mainly through factory financing,” he said.
Finding a discount or making an offer below MSRP remains difficult given inventory levels. That means a customer’s best bet for saving money is a loan, even as the Federal Reserve continues to raise interest rates.
“It’s easier on new cars than on used cars,” he said.
No matter how much you spend, be prepared to accept what’s available or wait.
“You could have the car built, here’s the build date in a few months and you get it a few weeks after that. It’s either going to be on the train now or maybe we can get it from somewhere else. ” he said.
Although prices remain high, experts predict they will drop this year. JP Morgan expects new car prices to fall by up to 5% and used cars are expected to fall by 10% to 20% compared to last year.
