On the premiere episode of Ask A Car Dealer, Joey Little and Todd Gentry answer the question that’s on everybody’s mind:
Where did all the cars go?
Car dealerships around the country are looking out onto near-empty lots. Nationwide, inventory levels are down as much as 70 to 80 percent.
Todd Gentry is the General Sales Manager at Gary Crossly Ford in Liberty, MO, just outside of Kansas City. He currently has 98 new and used vehicles in stock compared to the 500 that the dealership would normally have on hand.
“If you come out and look at a car on Thursday. It’s Gone Thursday night. It’s that crazy. Especially if you’re looking for a pickup.
If you’re looking for a truck and you find that we’ve got what you want, the time is now. You’ve got to pull the trigger.
Car salespeople have been saying that for years to create a sense of urgency, but today the old cliche is true.
“We had 4 customers in here on Saturday looking at the same vehicle,” Gentry says.
Inventory levels are so drastically reduced today mainly because of the worldwide shortage of microchips. In 2020 many automotive factories were locked down in response to the pandemic. As some factories have resumed production remain dependent on parts and supplies from other factories around the globe that have not returned to normal.
Used car prices are rising rapidly in response to this shortage of new cars, trucks, and SUVs. Dealers have to have cars to sell so they are battling each other for the limited selection of quality used cars at the wholesale auctions kind of like grocery shoppers racing to the toilet paper aisle last year at the start of the pandemic.
“The difference between toilet paper and cars,” says Todd is that you don’t have somebody at the front of the store bidding up prices on toilet paper, but they sure do for cars.
“It’s an auction. Whoever has their hand up last is the one taking the car home.”
That’s good news for you if you have a car you need to trade or sell. Used car prices rising makes that extra ride in your driveway more valuable. The bad news is rapidly changing valuations are causing more confusion than ever when trying to figure out exactly what your used car is worth.
What’s the difference between retail and trade-in values for my car?
Consumers see prices online for vehicles similar to theirs and are rightly confused when they take theirs into a dealership and get offered thousands less.
Todd and Joey tackle this touchy subject by comparing the process to the TV Show Pawn Stars. When someone wants to sell their one-of-a-kind Johnny Unitas signed football. Rick will bring in an expert to authenticate the signature.
Boom. It’s 100% real, and it’s worth all the money.
The smiling customer is then confused every single time when Rick turns around, with the appraiser standing right there and offers them about half the money.
Hey, I got bills to pay, employees to pay, and I’ve got leave room to make a little money for myself. It’s a business.
Holding cost is what they call all of that in the car business.
Dealers would still prefer to purchase vehicles from their customers, though, as opposed to the wholesale dealer auction.
“The best place to buy a car is from a customer,” says Todd. “Because then I’ve got a real story to tell the next customer.”
Can I order a car at a car dealership?
Just because the dealerships don’t have as many cars as they normally would doesn’t mean you have to do without, but it might mean buying your next vehicle a little differently than you’re used to.
Many customers are getting around the inventory shortage by custom ordering the exact vehicle they want with the exact options they want in exactly the same way they would ask a waitress to replace the Brussels sprouts with fries on the daily country fried steak special.
The difference between country-fried steak and getting the exact F150 you want is that ordering off the menu at a car dealership might end up saving you money.
There’s no reason to pay for all the goodies and a tow package on a truck that’s never going to pull anything more than coffee and donuts. Just ask Joey Little.
In fact, go ahead and ask Joey or Todd anything you’d like. Ask about the car business, about life in Kansas City, or even about Dozer, Gary Crossley Ford’s Barketing Intern.
The Ask a Car Dealer podcast can be found on your preferred podcast listening platform including:
Ask A Car Dealer is hosted by Joey Little and Todd Gentry. Any views or opinions expressed are our own and not those of our employers, our sponsors, our friends, relatives, or that cashier we talk to sometimes at the gas stations when we’re buying snacks.