Sticker Shock: How Car Dealers Are Rewriting the Pricing Playbook
Download MP3New Car Market Crisis
- Inventory shortage getting worse - Despite predictions that chip shortages would resolve, new car inventory is actually becoming scarcer
- Empty dealership lots - Most lots now display used cars instead of new vehicles, with many dealers down to single-digit new car inventory
- Real-world examples:
- Major Chevy dealer dropped from 80 cars to just 5 on the lot
- Fort Worth dealership client went from 250-300 cars to zero inventory - every car is pre-sold and delivered same day
- Chrysler Pacifica hybrid example: only ONE available within 300-mile radius, and it's already pre-sold
- Extended wait times - New car orders now taking 5-6 months (potentially longer), reminiscent of Soviet-era car buying
- Factory shutdowns - Manufacturing facilities closing for extended periods, further limiting supply
Used Car Market Reversal
- Price volatility - Used cars that were selling above new car prices are now "dropping like a stone"
- Auction trends - Vehicles previously appreciating in value at major auctions like Mannheim are now declining
- Dealership practices - Some dealers were marking UP used car prices over time instead of traditional depreciation
- Market drivers:
- High volume of repossessed vehicles entering the market
- Demand destruction for gas-guzzling SUVs and large trucks due to fuel price inflation
- Average car payments exceeding $700 monthly (comparable to rent from 3-4 years ago)
- Buyer recommendation - Wait 1-2 months if shopping for used cars as prices continue falling
Electric Vehicle Developments
- New player: VinFast - Vietnamese startup launching electric crossovers in the U.S.
- Rapid expansion - Planning 24+ California showrooms by end of 2022, targeting high-volume production
- Market opportunity - May have vehicle availability where traditional manufacturers don't
Industry Analysis
- Historic moment - Automotive industry experiencing unprecedented changes across all segments
- New business model - Manufacturers and dealers moving toward low/no inventory operations
- Consumer impact - Buyers facing longer waits, higher prices, and limited choices across new and used markets
Key Takeaways
- New car shortages are structural, not temporary
- Used car prices trending downward after peak highs
- Electric vehicle options expanding with new manufacturers
- Traditional car buying experience fundamentally changed
