Car dealerships are now paying prices above the original MSRP just to get vehicles on the lot to sell during the COVID-related inventory crunch.
Dealer trades have always been common in the car business. If one dealer happens to have a car that another dealer has a need for there’s a deal to be made whether it’s for one car or for 27.
Todd Gentry, from Gary Crossley Ford just outside Kansas City says his store recently purchased 27 Ford Fusion Hybrids from a dealership in New York where Fusion Hybrids didn’t happen to sell well.
Such hidden pockets of new vehicle supplies are becoming scarcer as dealerships around the US continue to suffer from inventory shortages caused by factory line closings, supplier challenges, and transportation delays.
The competition for any available inventory has driven the wholesale, dealer-to-dealer, backroom, buddy-to-buddy price ABOVE the suggested retail consumer price printed right on the window.
The car business is literally upside down.
Every single dealer and every single manufacturer is suffering from this crunch. Nobody is exempt.
Consequently, a lot of old truisms about the car business just don’t carry as much weight as maybe they once did.
Once upon a time, some financial advisors decided that it was always best to purchase used cars to avoid new car depreciation. A handful of TV talking heads and radio financial gurus built their careers on reciting that same bit of advice. Then a million uncles, brothers-in-law, and self-professed back-yard-barbecue life coaches grabbed onto that nugget and handed it out at every unsolicited opportunity.
But conventional wisdom is wrong today.
Cars aren’t depreciating right now the way they once did because supply and demand are not in synch.
Wholesale buyers are paying retail prices.
Used cars are selling for more than buyers paid new at the dealership.
When is the best time of year to buy a new or used car?
It always depends on supply and demand, but in times gone by, dealers and manufacturers would find themselves with excess supply at the end of the model year so dealer discounts and factory incentives.
That was never a certainty though, and those factory rebates and incentives were based entirely on how many of each specific model was available for sale in each specific market during a specific time period.
Supply and Demand.
When is the best time of the month to buy a new or used car?
At your next family reunion, Uncle Smarty Pants is likely to tell you that you can always get a better deal at the end of the month because the salespeople are desperate to hit their quota.
And at some dealerships that may be true, managers may hold firm rolling the dice that the customer will agree to the higher price. With the end of the month and an empty sales board staring at them, they can be more flexible.
That’s not the way it is at Gary Crossley Ford
“We don’t really do it that way. We want to sell you a car at the beginning of the month just as bad as we do at the end of the month,” says General Sales Manager Todd Gentry.
“We want you and your friends and your family to buy one here.”
He says he and his team are here to help you buy a car that fits your needs, your wants, your budget, and your timeline.
At Gary Crossley Ford, the best time to buy a new or used vehicle is whenever you’re ready
Ask A Car Dealer is hosted by Joey Little and Todd Gentry from Gary Crossley Ford in Kansas City. Drop them a message with any question you have about the car business, life in Kansas City, or the uncomfortable conversation with customers about random things discovered in cars in the service department.
Any views or opinions expressed are strictly Joey and Todd’s and not those of our employers, our sponsors, or any of our cousins no matter how distant.