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New car sales down, dealerships see more interest in used vehicles

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Posted at 6:17 PM, Jul 28, 2020
and last updated 2020-07-28 23:48:29-04

The COVID-19 pandemic has dinged the auto industry, but one sector that's doing much better than it did pre-pandemic is used cars.

Mullahey Ford in Arroyo Grande says 80% of sales are now used vehicles.

"It's kind of turned to a used car market," said Doug Epley, Mullahey Ford General Manager.

At the beginning of the pandemic, Ford shut down to build respirators and face masks.

In turn, they temporarily quit making vehicles, impacting all 3,000 dealerships, including those here on the Central Coast.

"You can take a look around our car lot here and see that we usually have about 150 new in stock. That's new vehicles and right now, we're sitting at around 50," Epley said.

Instead, the car lot has more used vehicles and that's exactly what some shoppers are looking for.

"It's always a bargain," said car shopper David Richards. "Let the first person take the big hit on depreciation and then pick up on that and a car with low miles is still good for a lot of miles."

According to JD Power, new vehicle sales are down 9.5% this month compared to July of last year.

When it comes to leases, Mullahey is seeing a new trend in that sector, too.

"Instead of turning in their leases and purchasing new vehicles, they're buying out their leases, so it's more affordable for people right now," Epley said.

Meantime, with the Ford factories back up and running, more of those new vehicles will be trickling in soon.

"There's a huge bottleneck right now of getting vehicles to us. We had seven show up in the last week," Epley said.

JD Power says that for the fourth month in a row, trucks and SUVs are on track to account for more than 75% of all retail sales nationwide.

Total sales this month are down around 16% nationwide compared to this same time last year.

Car prices are at their highest level ever, according to JD Power, with the average transaction being around $34,000. That's up nearly 4% compared to 2019 and 24% compared to 2011.