DALLAS — If you are looking to buy a car, you are likely in for few options and some rough sticker shock right now. On the other hand, if you’ve got a car to sell, now is the time to bank big.
Car dealers in Texas and across the country report a severe shortage of vehicle inventory, especially of new cars, on their lots right now.
Andre Moore’s lot at Uptown Chrysler, Dodge, Jeep, Ram in Dallas had far more empty spots this week than he likes to see. After all, his inventory is his money maker, and right now, he says the supply just isn’t there.
“The inventory is declining by the day,” said Moore. “As you can see, the demand is a lot higher than the supply.”
Moore said he’s had other dealers calling him, trying to nab up hard-to-find cars when he gets them in stock to fill their own customers' wants and needs as Moore tries to keep a decent inventory of his own.
The problem, Moore says, is a shift in manufacturing needs over the last year.
“When the COVID first hit, a lot of the semiconductors converted over to household technology: laptops, desktops, those types of things because people started working in house,” said Moore.
Semiconductors are essential in making microchips, which are computer components used in everything from cell phones to vehicles. According to "Car and Driver," when the pandemic started shutting everything down, car manufacturers canceled their microchip orders due to low demand for vehicles and those chips started getting sent to other industries that were experiencing heavy demand.
Now, as the world reopens and demand for new vehicles is again on a sharp rise, those chip inventories are now proving difficult to come by and are leading to a lack of new cars reaching dealerships.
So, Moore said he and a lot of other dealers are compensating for the low new car inventories by trying to offer up more pre-owned inventory, and they’re making some tempting offers to get their hands on those cars.
Daniel Picena and his girlfriend Victoria came to Moore’s lot just to browse this week, but ended up driving off in a brand new ride that day.
“It’s super nice!” said Picena, opening the panoramic sunroof on his new SUV.
Obviously, the couple found a car that was right for them, but it was actually their old car that they said sealed the deal.
Picena said he came to the lot considering a trade-in of his 2015 vehicle and had a ballpark of its value in mind, but the salesman surprised him with his offer.
“Honestly, I thought [the value] was 000, so I just kind of threw something out there and turns out it was actually valued at like $9-10,000,” said Picena.
He ended up getting about $3,000 more than he may have normally in the trade-in, making the new car an instant yes for the couple.
Moore said he doesn’t even buy or sell vehicles above list price at his lot. The list prices are just that high right now.
“That’s a 3/4 ton Laramie Longhorn,” said Moore, pointing to a pre-owned red pickup truck he just put on the lot. “MSRPs for $73,000 new, and it’s retailing right now, with 5,000 miles on it, for $73,000.”
It’s unclear how long that microchip shortage will last and continue affecting the vehicle industry. Some experts have said it could potentially stretch into next year.
As long as it’s a factor, though, Moore said it’s clearly a seller’s market in his line of work. He said he’d greatly encourage anyone with a car to sell to pursue that now and get a piece of that high demand and those attractive blue book values.
However, even though it’s his business to sell cars to people, Moore said he’d recommend waiting to buy until better days — if at all possible.
“If you are at a place where you don’t have to buy a car — I know this sounds odd coming from a car dealer, but it’s just honest — is I would just sit still,” he said.
However, if you are in a spot where you can’t hold off buying a vehicle any longer, Moore recommends you shop around and look for a deal that’s right for you, and that doesn’t exceed the actual market value of the car.