Making ends meet: a chaotic automotive market

LOUISVILLE, Ky. (WAVE) – Haggling over the price of a car is an American tradition. It used to be the most stressful part of car buying negotiations, but in today’s world of supply and demand issues, you’re lucky if you can even find a car to negotiate.

Like most of our world since the pandemic, it’s unlike anything we’ve seen before. Growing demand, manufacturing slowdowns, supply chain issues and skyrocketing prices have made buying a car very expensive and possibly very stressful.

WAVE News covered all the economic changes during the pandemic. WAVE News producer Dustin Weekley never thought much about it until the story found its way into his life.

“My car broke down in December,” Weekley explained. “I was hoping it would take maybe a week, and I would have to go for walks for maybe a week, but a week turned into three weeks, then it turned into a month.”

Weekley, like so many other Americans, needed to find a new car fast.

Nathan Hecht, founder and CEO of Rodo, an app that lets you buy or lease cars from local dealerships without leaving your home, points out that what we’re seeing today is a textbook case of supply. and demand.

“Even though automakers have their assembly lines up and running, there’s a shortage of semiconductors or computer components for those vehicles,” Hecht said. “It’s basically the dynamics of supply and demand where demand exceeds supply.”

Prices have also increased with demand. The Department of Labor shared in a January 2022 study that this is the largest increase in vehicle prices in nearly forty years.

“Finding a car in my price range was a bit difficult,” Weekley said.

The COVID-19 pandemic has caused the temporary closure of many businesses, including dozens of factories. Although most businesses are operating at full capacity, the necessary supplies may not be available.

“In general, stocks are limited, so there are many brands and models that consumers won’t necessarily find,” Hecht said. “You’re going to have to be a little more flexible than a year or two ago.”

Weekley agrees that car buyers should do their research first while being flexible.

“From all the stories we told, I knew it would be hard to get a good deal, and it turned out to be true,” Weekley explained.

Weekley discovered that it was not only hard to find a good deal, but also hard to keep a deal if you found it.

He found a car that ticked a lot of boxes on his wish list, but lost it as quickly as he found it.

Hecht emphasizes online shopping for your automobile on sites like rodo.com can bring more choices and better deals.

“Maybe your local inventory has limited inventory, but maybe a dealership 100, 200, 300 miles away has inventory and they’re still competitive,” Hecht explained.

Hecht also pointed out that the same things that work against you can work for you if you sell or trade in your car.

Car prices have gone up, but so has what a car dealer may be willing to pay for your trade-in.

“Your used vehicle is very valuable,” exclaimed Hecht. “There are many companies that will become competitive enough to try and buy this business from you.”

The most important question when buying a car online or in the field is: “Do you really need a new car right now?”

The market is currently chaotic and could stay in this frenzy at least until the end of 2022, if not longer.

“You should be patient and wait a few more months as we start bringing more vehicles to market,” Hecht said. “Prices are likely to come down to some extent in the near term.”

With more buyers now looking for fewer cars due to the COVID-19 pandemic, here are some things to keep in mind.

• Make sure your vehicle priorities are set.
• Be flexible. Remember there is a shortage of supply.
• Make sure your financing is in place.
• Have your deposit on hand.
• Your trade-in value has also increased, use it.

“I thought it would be a lot easier than it was,” Weekley pointed out. “Contact the dealer. It’s something I didn’t do and it made the situation much more difficult.

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