Car Market Report Update Summer 2022
Like many of you, I keep watching the car market and keep shaking my head. Inventory is still spotty. Prices are still exorbitant. We are stuck in a sort of limbo between buyer’s and seller’s markets. We’re certainly not in 2019 any more. Naturally, I picked this time to start car shopping…
And it hasn’t been easy, to say the least. I am trying to find something with fun, utility, and that’s way more fuel efficient than my Colorado ZR2—something that is good to drive, will still enable weekend warrior exploits, and that better suits my long weekday commute. Midsized pickups are not exactly designed for these needs, and I’ve been weighing my options.
I’m not really any closer to a decision, but here’s what I’ve observed—at least in New England. I know that new and used markets vary wildly throughout the country, but these are my main takeaways from the last few months.
Inventory is recovering, though it’s not at pre-pandemic levels. The big franchises with lots of allocation have a lot more of everything. Smaller ones are still struggling. Used dealerships are in good shape as far as inventory goes but are expensive. You really have to shop around to find what you want, and AutoTempest is obviously a great place to start. It may be worth it to widen your usual search parameters to include outlying areas, as it may be challenging to find local dealers with the right vehicle. Given the situation, some are copying Carvana and Vroom by offering shipping services that are easy to arrange and sometimes free if you’re a certain distance from the seller—something worth looking into if you don’t want to travel to pick up your new vehicle.
Prices are up. Room to negotiate is down. Dealers are holding onto inventory instead of making deals or sending the cars to auction. I understand they want to get their money back after spending so much on trades over the last few years, but I don’t know how they can afford to keep sitting on so many cars. As a consumer, it’s a war of attrition—how long can you wait to buy? As of this writing, wholesale prices are finally coming down. Hopefully we will start to see relief on lots within the coming months.
If you show even a little bit of knowledge, no one wants to talk to you. It seems dealers are waiting for people who lack any semblance of shopping savvy or who are buying out of necessity. When you make contact, you get the mostly automated spam blitz of e-mails, texts, calls, etc. At this point in the process, dealers clearly want you as a customer. Once you share what you want in terms of features, trade, and purchase price? Crickets. I’ve bought plenty of cars (and I’ve been on the losing end of more deals than I care to admit), but I’ve never been so ignored simply by asking basic questions about lending rates, vehicle history, and the “necessity” of dealer markups. Dealers are so desperate to make up for lopsided trades and low inventory that they are willing to wait for less inquisitive customers.
There are still some good trades to make, but you need to be patient. I’ve received offers on my truck ranging from $28,000 - $37,000. That’s quite the spread, to be sure. Jumping on the first seemingly good deal can be tempting, but due diligence is required. Especially if you’re looking for a new car. For example, some dealers will mark up over MSRP but allow for more cash on the trade; others will lowball you on your current vehicle but won’t charge over sticker. The best, obviously, is to find a vehicle you want at the right price and a good offer for your trade if you have one. You just have to be willing to research and wait.
With new regulations proposed by the FTC, the car market could potentially become a lot easier to navigate. Consumer advocates support moves to ban bait-and-switch claims, fraudulent junk fees, surprise junk fees, and to require full upfront disclosure of costs and conditions. How this will affect the market is hard to tell, but it will likely make the backend of an automotive transaction easier to complete.
What are some of your observations and predictions about car buying? Let us know in the comments.
Bill hosts a blog and YouTube channel that lead him to think more deeply about what it means to drive. The views and opinions expressed here are his own and may not align with the founders of Everyday Driver.