Turn on the TV or click on a news website, and you’ll see reports of turmoil in the auto industry. The pandemic has led to a critical shortage of computer chips—essential components in today’s technology-laden cars.
It’s a terrible situation for new-car shoppers. Tesla is making customers for its Model 3 wait as much as five months to take delivery. And General Motors is removing some vehicle features to stretch out its chip supply. Imagine dropping $75,000 on a top-line GM vehicle only to discover that expected equipment like a heated steering wheel or ventilated seating is absent.
And the pressure on the new-car side of the business is pushing into used vehicles. When people can’t find the new car they want, they’ll turn to a late-model used car as an alternative.
At Trust Auto, we recognized what was happening in the industry early on. Following the shutdown of new car factories in early 2020, we quickly realized there would be unprecedented demand for newer, high-quality used cars. So, we promptly worked to develop a strategy that would help us meet our customers’ needs.
To begin with, we turned to our strengths, which include a team of dedicated buyers. Unlike smaller dealerships that rely on people who wear many hats, Trust Auto has team members who focus only on sourcing inventory.
Next, we reinforced our relationships with long-established industry contacts—key players in the used car pipeline. It’s all about having access to the right cars, trucks, and SUVs before anyone else. At the same time, Trust Auto took a more aggressive approach with trade-in offers. Plus, we got creative in recruiting people to sell us their cars without buying a replacement vehicle.
These techniques have enabled us to maintain a steady selection of 100-150 premium vehicles throughout the crisis. This is one of the most extensive used car inventory levels you’ll find among independent dealers in the region.
But offering a wide choice of cars is nothing without a dedication to high standards. An essential part of the Trust Auto process is ensuring every vehicle provides the ideal combination of quality and value for our customers. It’s not an exact formula. Instead, we have to assess each car by reviewing its history, condition, and price.
And let’s be upfront about vehicle pricing. According to Car and Driver, used car costs increased 35 percent in 2021. And that doesn’t even take into account market conditions from the first year of the pandemic. So, we look for vehicles that price well, given the current state of affairs. Are used cars more expensive now than a year ago? Yes. But, this doesn’t mean we can’t look for great values now for our customers.
A recent story from industry publication Automotive News sums up what many analysts are saying: things won’t get much better in 2022. Chip supplies are still tight, so new car production will remain hampered. And as long as there are fewer than normal cars coming out of the factories, demand and pricing for used vehicles will stay high.
This situation creates a problem for customers, especially if there’s an urgent need for a car. Waiting could lead to even higher prices. No one can know with certainty what will happen.
Further complicating the buying decision is an anticipated increase in interest rates. Bankrate.com expects car loans to cost more in 2022 as the Federal Reserve tightens the money supply to keep a damper on inflation.
So what’s a car shopper to do? Unfortunately, there’s no easy answer. Trust Auto advises our customers to do their research to better understand today’s market. And, if the need for a car is immediate, be ready to act. Well-priced vehicles don’t stay on the lot for very long these days. Contact Trust Auto if you’ve got questions on the situation or need assistance locating a particular car.