By on January 5, 2022

Tacoma Trail Edition. Toyota

To say that headline is an understatement is akin to saying Vesuvius barely covered Pompeii. The last calendar year saw plenty of struggles for those trying to move metal, many of which resulted in empty dealer lots bereft of product to actually sell. A colleague in the industry told this author he had an up who strolled into his showroom loudly declaring “I’m looking for a ’22 Suburban,” to which my friend replied “Me too, buddy.”

Yeah, it was that kind of year.

(Read More…)

By on December 20, 2021

If you’re in the market for a new vehicle, you’ve likely noticed that some of the models you were interested in aren’t available in your preferred format and happen to be accompanied by sizable dealer markups. Well the used market, formerly a refuge for those seeking a bargain and a shrewd way of dodging the steepest period of deprecation, isn’t doing much better.

According to Black Book, the typical transaction price for used vehicles has gone up by over $500 in less than a month. Pegged at $27,000 in November, the average secondhand car now trades for over $27,500. As we’ve recently covered just how wild secondhand vehicle prices have become in 2021, we’ll keep this one relatively brief. But it must be said that automotive values are starting to seem totally disconnected from anything that could be considered rational as cars now have MSRPs a third higher than they were at the start of 2021.  (Read More…)

By on December 13, 2021

Car dealers have been polled for the fourth-quarter Cox Automotive Dealer Sentiment Index (CADSI) and they’re still incredibly optimistic, despite losing some of their earlier confidence that new-vehicle sales would be relatively healthy.

The dealer optimism – especially among franchised entities – seems to be wholly tied to profitability here. New vehicle sales dropped in 2019 and absolutely cratered in 2020 due to the nation’s response to the pandemic. In spite of there being plenty of talking heads in the news media telling you not to stress about the economy, inflation has created pricing increases across the board and automobiles are at the tippy top of that list. With inventories remaining relatively lean due to production slowdowns, staggering dealer markups have become the norm. Basically, stores just seem happy that they can charge more per car while they’re in short supply. But they’re also starting to have concerns about the long-term viability of the market and are are feeling the pinch of rising operating costs.  (Read More…)

By on December 9, 2021

Used-vehicle prices set another record last month thanks to elevated demand and suppressed production of new cars. Depending on who you ask, the typical transaction fee for a secondhand automobile rose nearly 50 percent in November vs the same period in 2020. While the pandemic had meaningfully suppressed demand during that time, that’s still a staggering increase over any 12-month period.

Sharing Cox Automotive’s Manheim Used Vehicle Value Index, Automotive News nailed down the annual difference to a 44-percent increase. This also represents the November pricing index swelling by 3.9 percent against October, which is noteworthy in itself. But what does that look like in dollars?  (Read More…)

By on December 2, 2021

No one reading this will assert the current environment is anything but a seller’s market. Numerous vehicles are being hawked for many thousands (in some cases, tens of thousands) over sticker and a vast amount of machines are pre-sold before they arrive at dealerships on the back of a hauler. And all that assumes there are any rigs to be had at all.

One customer north of the border is alleging they have been denied the opportunity to buy a vehicle unless they also agreed to take roughly $3,000 worth of warranties and rustproofing. The dealer, of course, denies it all.

(Read More…)

By on October 19, 2021

The National Automobile Dealers Association (NADA) has elected Mike Alford as its chairman for 2022. The decision was announced shortly after the group’s board adjourned on Tuesday.

Alford — who heads Marine Chevrolet Cadillac in Jacksonville, North Carolina — currently serves as NADA vice chairman and will be taking over for Paul Walser next year. Geoffrey Pohanka was chosen as the vice-chair, setting him up as a strong contender for the top position in 2023.  (Read More…)

By on March 22, 2021

Buying a new car usually requires visiting a dealership.  That puts you at a disadvantage: You’re on foreign soil, and they know you don’t know your way around.

(Read More…)

By on November 2, 2020

Carvana dealership, Image: CarvanaAs other used car retail outfits like Shift go public in an attempt to grow their number of stores and break into the (lucrative?) used-only dealership market, established player Carvana has a different issue on its hands: There just aren’t enough used cars to buy these days.

(Read More…)

By on October 14, 2020

Used car retailer Shift is going public today, and continues its promise to make car shopping a breeze during these here Quarantine Times. But will their not-so-unique (and now public) model make a dent in the market?

(Read More…)

By on September 22, 2020

Shutterstock/OlegGr

Hi there! You’ve probably learned a bit about your author during my time at TTAC, but you might not know I toiled in the service department of various car dealerships early in my career.

I started as a porter in high school, then eventually worked as a greeter in the service bay (basically, managing the flow of cars and customers in the service drive), before finally working as a service writer (aka service advisor). I did that final job both in an express-service lane at a dealer (think oil changes and basic maintenance) as well as in a capacity as a “regular” advisor (not just oil changes, but all types of repair). (Read More…)

By on May 22, 2020

Michigan auto dealers will be allowed to resume in-person sales on Tuesday, according to the latest in a long list of executive orders signed by Gov. Gretchen Whitmer. The state, which harbors the fourth-highest coronavirus death toll in the country (following New York, New Jersey, and Massachusetts), has enacted some of the strictest countermeasures in the country.

This has created no shortage of pressure to both reopen Michigan so life/business can return to normal and maintain closures to avoid further contagion risks. Obviously, that’s proven difficult to do. All steps taken towards reopening come with conditions, including those established for Michigan’s dealerships.

But first, some backstory.  (Read More…)

By on March 10, 2020

Colorado has been considering allowing automakers to sell electric vehicles directly to consumers, but pushback from dealerships complicated things. Senate Bill 167 was intended to level the playing field against Tesla, which already engaged in direct sales, by opening up the door for rival electric vehicle manufacturers to similarly bypass the dealership model.

However, dealer groups noticed the language in the bill effectively permitted any automaker producing EVs to engage in direct sales, Naturally, they cried foul. The bill had its final legislative hearing on Monday, and its new language identifies a difference between a legacy automaker with existing storefronts and EV firms without them.  (Read More…)

By on February 4, 2020

We’re not talking about my Golf Sportwagen purchase today; they were slow to negotiate, but not sleazy. The topic at hand is what happened this past weekend when I helped my grandmother purchase a used car.

It turns out that at some dealers, even though the calendar says 2020, sales practices are more in line with 1980.

(Read More…)

By on April 11, 2019

What happens when specific used car requirements combine with some old fashioned encouragement from TTAC staff?

A one-way road trip spanning five states, that’s what.

(Read More…)

By on April 8, 2019

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.  (Read More…)

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