Daily Auto News Car Shoppers Find Poor Selection at Many Dealerships
Daily Auto News
Cash for Clunkers is over, but high demand for the program has left many car lots emptier than usual.
The Los Angeles Times reports, “Car buyers who go shopping over the next several weeks may find the selection a bit thin.” Rich Smith, Chief Financial Officer of a group of California Chrysler, Dodge and Jeep dealerships, told the Times “You’re not going to be able to find the car you want in September.” Glendale Dodge, one of Smith’s dealerships, is reportedly carrying just 62 cars on its lot this week – barely more than a quarter of its usual inventory.
Dealerships are restocking as quickly as they can, ordering new cars from manufacturers. But, Kansas’ Wichita Eagle reports, many cars not yet built are already spoken for. Brandon Steven, Managing Partner of several Kansas Toyota dealerships, told the Eagle that he has a shipment of new cars coming soon from Toyota factories, but “every single one is assigned to a customer, which means it’s sold.”
Kicking Tires reports, “Car buyers will likely have to deal with slim pickings for most of September as dealers reload — a process that usually takes 30-45 days as factories ramp up production. Supplies of the Clunkers program’s most popular vehicles,” including many fuel-efficient small cars like the Toyota Corolla and Ford Focus, “might be especially hard to find.”
The shortage has consequences for new car shoppers. The rules for ordering new cars vary slightly by manufacturer, but generally speaking, dealerships have two options when a customer wants to purchase a car they don’t currently have in stock. They can buy vehicles from other dealerships – though in the current shortage, that may not often be an option. That could also be an expensive proposition, since two dealerships would then be attempting to profit off of the sale. They can also order cars directly from the manufacturer, which might require the customer to wait some time for the car to be built and shipped.
However, The L.A. Times notes, some analysts expect “auto manufacturers to be more aggressive with incentives and advertising to prevent a huge drop in sales after the clunker program expires.”
Used car dealerships are seeing a similar shortage. The AP reports, “Mom and Pop used-car dealers are feeling the crunch as the old Caravans and Cherokees that provide their livelihood get traded in and banished to junkyards under Cash for Clunkers. By some estimates, three of every five of the used cars turned in for government rebates would have ended up on used car lots or resold for parts.”
That shortage will likely lead to a temporary spike in used car prices, in part because shoppers unable to locate a new car may turn to recent-model used cars instead.
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