Some dealers struggle to stock used car lots
The demand for used cars has some lots depleted, and salesmen struggling to keep up. It's a story that plays out not only statewide, but across the nation.
"It has been a struggle throughout the year, but we have been able to source vehicles from a different avenues," said Matthew Hensley, general manager of Midway Motors in Newton.
The lot, he said, is fully stocked.
There have been emails to former customers, and Facebook promotions searching for used cars. There's been more too — but don't ask Hensley for all of the strategies employed to keep Midway's lot fully stocked.
"That's like asking a fisherman where his honey hole is," Hensley said.
Some of this, he said, is fueled by a shortage of new cars. Supply chain problems for parts has led to delayed production of new vehicles.
Dealers have had to get creative, and commit more resources to the used market.
"They are short. Everyone is. That is the understanding across the country with NV. You take what you can get and take care of people the best that you can," Hensley said. " ... In tough times and good times, any business, if it is run the right way it will last and be successful. There are a lot of things you can blame things on, but if you keep taking care of things to the best of your ability, customers will keep showing."
Demand for used cars in Topeka is so high that Harrison Family Motors regularly sells those vehicles soon after putting them out on its lot.
This has been a good year for the dealership at 2501 S.W. 6th Ave., which has already brought in as much revenue in 2021 as it did in all of 2020, said its president, Derek Harrison.
"It's been just crazy busy," he told The Capital-Journal on Friday.
But rising demand has also brought higher prices, with the cost of used cars in the U.S. having risen by 10% in April, 7.3% in May and 10.5% in June, according to marketwatch.com.
That means dealers must pay considerably more to acquire used cars to sell, which can be a problem.
One dealer has 20% of his usual inventory
Trent Vausbinder said he usually has 35 or 40 vehicles for sale but as of Friday had only about 20% of that amount at Trent's Auto World, 109 S.E. 29th, which he's operated since 1999.
Vausbinder has had trouble finding reasonably priced used cars, he said, adding that prices have skyrocketed to the point where 2- to 3-year-old vehicles now cost more to buy at dealer auctions than they had cost brand new.
"You can get inventory, but you have to be willing to pay more for used cars than when they were new, which means you charge customers thousands more than they cost brand new," he said.
Vausbinder, who has sold cars for a living since 1982, watched an online Pennsylvania auto dealer's auction Friday in hopes of finding some decent deals.
"I've never lived through a time like this in our business, ever," he said.
Vausbinder's wife, Kim Vausbinder, called the current situation the "post-pandemic crisis."
Shortfall related to pandemic, computer chip shortage
The situation has its roots in the pandemic, when rental car agencies reduced purchases of new vehicles and automakers responded by cutting production, according to marketwatch.org.
Then, when manufacturers ramped up production late last year, they encountered a global shortage of computer chips needed to operate new vehicles.
With far fewer new cars being available, people who would ordinarily buy new cars are instead buying used ones, Harrison said, adding that current demand for used cars is the highest he's ever seen.
Harrison said Harrison Family Motors has found it challenging amid the current situation to keep up its inventory but has accomplished that to a degree by taking steps that include working with a wholesaler and reconditioning and selling vehicles it receives through trade-ins.
Marnie Patterson, office manager of Auto's Inc. at 930 S.W. 6th, said she's been with that company since 1996 and has never seen anything like the current situation.
One result of that situation is that Patterson is seeing more people pay cash to buy used cars, she said.
"Most of the time I don't have cash buyers," she said. "We put people on payments."
Vausbinder is waiting patiently for used car prices to go back down.
He said he anticipates that will happen early next year, once a large number of new cars are once again being produced.
— Chad Frey, Newton Kansan, contributed to th