The cars are back.
Or, at least, a little.
Auto dealers in the Twin Cities are reporting a slight increase in their sales lot inventories, with automakers churning out more automobiles than a year ago. This means buyers may have an easier time finding vehicles they like, even if prices remain high.
“Our ability to get vehicles for customers is a little better, and that’s good news for everyone,” said Tom Leonard, president and owner of Fury Motors in St. Paul and vice president of Minnesota. Automotive Dealers Association.
While most Minnesota dealerships still won’t have inventory beyond a 30-day supply for next year, Leonard said, the situation is much better than last year, when news cars were hard to find and people were selling used vehicles for more than their original purchase price.
Unit production and inventories are up from the same period a year ago, according to industry reports.
At the end of the recent third quarter, inventory nationwide was up 44.3% from the start of the year, according to the National Automobile Dealers Association.
Less than one million vehicles were available in the United States at the start of 2022. At the end of September, 1.43 million units were on the ground and in transit, an increase of almost 13% compared to the previous month.
This growth in inventories is explained by the increase in vehicle production. For the recent third quarter, manufacturing output of all vehicles in North America totaled approximately 3.8 million units, an increase of 24.9% over the same three-month period in 2021, according to the Automotive Innovation Alliance.
According to the alliance – a Washington, DC-based advocacy group representing manufacturers producing nearly 98% of new cars and light trucks sold in the United States – production has increased for two consecutive quarters.
It’s a significant turnaround from the previous three quarters that saw output slump largely due to a global shortage of semiconductors, a key component in automobiles and computers.
Although the situation has gradually improved, consumers are still facing high prices and limited selection as the industry catches up with backorders.
Limited supply pushed prices higher. At the end of September, new vehicle prices remained at record highs, with the average transaction price reaching $45,622, an increase of 6.3% from the same month a year ago and the fourth highest of any month on record.
Buyers looking for specific colors or premium packages should be prepared to wait up to 60 days, Leonard said. “We’re probably still a year away on the supply side from reaching full steam.”
Used cars still often sell for as much as new cars, and new cars still take a long time to reach dealerships or be delivered to homes, said Andrew Guthmiller, founder and owner of Car Concierge, a Twin company. Cities that guides buyers. the car buying process.
People who need to buy immediately, he said, are often forced to settle for what’s available, not what they want.
If a customer is able to travel to pick up a car out of state, they may have better luck, Guthmiller said.
“One of the ways to speed up getting a car is to not stay local,” he said. “While it would be nice to buy a car in Minneapolis, sometimes we can speed it up and find a justifiable price by getting out of the Minneapolis area and into Iowa or Colorado.”
Among Guthmiller’s customers, buyers who buy a particular car have generally already researched the cost and are prepared for the expense. Overpaying for additional dealer services or aftermarket accessories, however, is what buyers want to avoid.
These additional costs can range from $300 to $7,000, Guthmiller said.
“The most important thing is that people have to be patient and take their time, more than ever,” Guthmiller said. “If you rush out and buy at the first opportunity, it’s costing you a lot of money to do it that way.”
Ned Zimmerman-Bence was suddenly forced to decide to buy a new car after someone hit his family’s Volvo while it was parked outside their St. Paul home a few weeks ago. Fortunately, he and his wife own another vehicle, a Toyota.
His wife usually drives the Toyota, so Zimmerman-Bence uses ride-sharing services. As an entrepreneur, his work schedule is flexible. And, as empty nests, he and his wife no longer need a second vehicle to transport their children to school or activities.
With record prices and low supply, Zimmerman-Bence isn’t sure the expense is worth it.
“Why bother paying for a new car and insurance?” he said. “Cost isn’t a huge barrier, but the car sits idle 80% of the time. Why pay $35,000 for something that will stay put and depreciate over time?”
If he had to buy a second car, Zimmmerman-Bence would choose an electric vehicle for the lowest emissions. But, he says, he’s not looking forward to the car-buying process, which he describes as unpleasant and time-consuming. He is also wary of potential maintenance and repair costs.
For the foreseeable future, he will likely continue to use ride-sharing options, he said.