We’ve heard many stories in the past many months on how different industries have been affect by supply and demand issues and have not yet returned to a pre-pandemic normalcy.
Our newsroom wanted to see where the automotive industry stood. Aaron Shearer, from Rt. 228 Auto Mall, spoke with our newsroom. He wasn’t speaking on behalf of all car dealerships, but he did offer his perspective on this current market after working in the industry for 30 years.
It seems there are both supply and demand concerns for car dealerships right now. For dealerships, there is a lack of new cars being delivered to their lots. For buyers, many of the used cars on the lots turn over very quickly; so, quickly, in fact, if feels like the vehicle is gone before buyers can get to the lot to either see them. As for the seller, it seems to be their market right now because of the money could potentially receive on their trade-in.
Dealerships
Shearer shared what it’s like for dealerships right now. He’s been in the industry for quite a long time and he says he’s never seen a market like this. He’s surprised to see used cars appreciate instead of the opposite.
He confirmed that new cars aren’t being shipped right now because of the chip needed for the vehicle. Apparently the building in China, where the chips were made, burned down a few months ago. So, the cars that are already built can’t get the chips to make them run.
Shearer also added that it’s actually a seller’s market because of the price being paid for trade-ins, which is very different in the car industry. He says vehicles have always depreciated and to see used cars appreciate is something new. In his opinion, he’s seeing many dealerships do the same as his company, selling a good number of used cars in order to have something to sell since the new cars are not on the lots.
Buyers
In our conversation, Aaron says that buying a car is different these days. He attributes that, in part, to an educated buyer seeing prices online and knowing their parameters in spending limits.
As for negotiating the price of a vehicle, Shearer sees that has changed as well. This isn’t strictly due to the current market, but has been happening over time. He thinks the negotiation process of days gone-by is almost a thing of the past. There is some room to talk about pricing, but not like it used to be. Sticker prices, mileage, car reports, and maintenance information can readily be found online which helps a buyer have a plan of action before coming to the dealership. Shearer thinks it’s a good idea for people to have a plan before they decide to buy a car.
On a different note for buyers, Shearer also added that in this current market, vehicles go quite quickly. It’s not a rare thing to see a vehicle be put online and then sold before a couple has a chance to get to a dealership to test drive it.
Sellers
Shearer says that people need to find a vehicle because cars break down, are involved in accidents, or families have different needs when it comes to space. With our current climate, that has led to it being a seller’s market. Since new cars are not readily available, used cars are what people can buy. So, when an owner trades in their vehicle, it’s very possible they can get more back on that trade-in than they expected.
Rt. 228 Auto Mall
Route 228 Auto Mall is located in Butler County at 215 Sharberry Lane in Mars, PA.
You can hear our complete interview here.
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