SEATTLE — The car buyer’s market has reached a volatile point over the past year.
New vehicle prices are up 6% year-over-year, according to the US Labor Bureau’s monthly report, and inventory remains relatively low at many dealerships.
In a positive trend at national level, the price of used vehicles has dropped by 11% compared to last year. However, this price drop may not be reflected in Seattle.
“I don’t want to say it’s empty, but it’s not as full as we’re used to,” said George Riad, owner of Daily Deals Auto Sales. “Normally, you can’t even get in here.”
Riad said a quality used car leaves the lot almost as quickly as it arrives. Over the past year, he said it has been difficult to keep enough inventory in stock without significantly raising prices.
“I’ve been in the business for 10 years,” Riad said. “I’ve never seen anything like it.”
Pandemic supply chain delays are still trickling down to small independent lots like Daily Deals.
The car lot on Aurora Avenue used to bring in eight or nine new cars a week, but Riad said they are now down to two or three.
“When I go to the auction every week, we’re competing,” Riad said. “So I’m competing with new car dealerships to buy.”
Riad said the new dealers keep the valuable change they get. Also, he has noticed that there aren’t that many trade-in car owners.
“Good cars don’t drive as much as they used to,” Riad said.
This comes at a cost to customers. The cheapest car is a ’99 Mercedes for about $5,000 on the lot in Riyadh. Almost everything else is close to $10,000 or more.
“The biggest issue right now if the average Joe wants fast transportation for a couple of thousand dollars — nothing,” Riad said. “It does not exist”.
He said cars he was able to buy a year ago for $6,000 now cost him $8,000. This leads to higher prices for potential car buyers.
Meanwhile, the first quarter of the year reached an all-time high for new car monthly payments. According to Edmunds, the average monthly payment is $731. That’s more than $70 more than last year.
The average down payment in 2023 is close to $7,000, Edmunds found.
Riyadh expects the market to remain flat for the rest of the year, but to recover in 2024.
“I think next year we’re going to see a completely different energy in the market,” Riad said.
About 70% of customers are financing and 30% are buying cash in the Riyadh lot. However, just a year ago these figures were reversed.
