How the pandemic affects supply and demand for automobiles

With a nation-wide shortage of new vehicles, buying a used vehicle might be a better option, but finding one could be your biggest challenge.

Posted: Sep 16, 2021 6:16 PM
Updated: Sep 16, 2021 6:27 PM

Hundreds of new cars are waiting to get microchips installed so they can be shipped out for consumers, but with a shortage of microchips, those vehicles aren’t going anywhere, anytime soon. That’s causing a demand for used cars, and consumers are paying top dollar to get one. You might think with the high demand and the high prices of vehicles, you would have higher profit margins, but Matt Nimey, the Owner of Nimey’s New Generation Cars says that’s not currently the case in this industry.

"Shipping has gone up. The cost of the vehicle has gone up. Buy fees have gone up because it’s harder for auctions and companies to keep employees and staff on board, so the expense all the way across the acquisition process has gone up."

The used car market is very competitive, and with demand so high, you’ll likely be paying top dollar for a vehicle.

"Prices I think have sort of reached a point where they may be maxed because a vehicle can only be worth so much money. At some point it has to stop going up, but I think we may have reached that point."

Many dealers depend on a high volume of sales to maintain operational costs, but with the lack of inventory, owners will need to find new ways operate.

"It’s hard to keep staff when you don’t have a ton of business going on. If you’re a sales team of 20 guys, and you used to sell 250-300 cars a month, but now you can only acquire 15-20 cars a month, how do 20 sales people make a living?"

The problem isn’t just a lack of inventory. The profit margin on a used vehicle is more competitive than ever, and being able to service a used vehicle is getting tougher by the day.

"It’s a little harder to get parts. It’s a little harder for a lot of the nuances in the car industry, so are the little dealers going to…. I don’t … I can’t say anybody’s going to go out of business at this point, but if it continues to get harder, I don’t know how many people will want to stay in the business."

New York Coronavirus Cases

County data is updated nightly.

Cases: 2527230

Reported Deaths: 56169
CountyCasesDeaths
Kings33439110849
Queens31559610296
Suffolk2398773609
Nassau2145703296
Bronx2078026754
New York1682394637
Westchester1437172340
Erie1065781950
Richmond890341936
Monroe845321188
Orange57620920
Rockland53178779
Onondaga52166762
Dutchess35671499
Albany30915390
Oneida28720589
Broome24552407
Niagara24076397
Saratoga20342201
Ulster17300280
Schenectady16779228
Rensselaer14839167
Putnam1250998
Chautauqua12449175
Oswego11708113
Chemung10966156
St. Lawrence10598127
Steuben10185173
Ontario9378110
Jefferson892476
Cayuga8674107
Sullivan849883
Wayne820284
Cattaraugus7752115
Genesee7038132
Herkimer6831128
Clinton675040
Tompkins652659
Fulton6365104
Madison6220102
Montgomery5993141
Livingston575571
Warren550184
Cortland535780
Tioga513072
Columbia5025111
Chenango470686
Allegany464197
Washington464167
Otsego459255
Wyoming440758
Greene440186
Orleans435587
Franklin430021
Lewis362138
Delaware357448
Seneca274663
Essex232731
Schoharie230121
Yates165728
Schuyler154417
Hamilton4383
Unassigned15130
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