How long will car dealers feel the effects of the inventory squeeze?

Only 18% of consumers said they overpaid for their latest car purchase over the last three months.

On today’s show, we’re pleased to welcome Jessica Caldwell, Edmunds‘ Executive Director of Industry Insights, to give us an update on automotive industry sales and inventory insights.

Caldwell says it’s definitely been a challenge out there. Inventory is down 79% from what would be considered a “normal period” at this time of year. On aggregate, sales are up from where they were in 2020, for this period. But sequentially, sales are falling each quarter. It comes down to inventory, says Caldwell.

used carsPricing is at record highs for both new and used vehicles. Everyone is used to major discounts from MSRP, but Caldwell says that’s just not happening. Used transactions from a retail perspective, are over $28,000. Things are just getting more expensive says Caldwell.

A survey conducted by Edmunds revealed that only 18% of consumers say they overpaid for their latest car purchase over the last three months. Nine percent of consumers say they got a good deal for their latest car purchase over the last three months. Caldwell says dealers want a lifetime relationship with their customers. Consumers are understanding vehicles are costing more and they aren’t able to get the deal.

Related: New vehicle average price soars to more than $45,000 in September

Caldwell says they’re seeing more people look at different brands, different segments, and colors. Dealers are looking to see what they can put consumers into because customers are willing to switch and compromise.

December is when Caldwell believes more cars will be available. Dealers need to gear up for when those cars are available and make the purchases happen at that point. Caldwell says we will be feeling the effects for quite some time for things to come back to normal if they ever do.

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