At the beginning of the pandemic, the car industry faced multiple obstacles including chip shortages and supply chain issues.
Now the demand for new and used cars is high as more people return to work in person.
“We went from having no customers because everything was shut down to getting a ton of traffic because the demand spiked," said David Idell, sales manager of Sunset Honda in San Luis Obispo.
High demand and low inventory are what most car dealerships are facing. Idell says at the start of the pandemic, people working from home sold their cars but now, it is a different story.
“It’s coming back where those clients are getting back to work and so now, the demand is coming back up for new and pre-owned vehicles," said Idell.
He says right now Sunset Honda has 22 new cars with 32 in transit, usually, that number would be 150 new cars on the lot.
The factors to blame? Well, just about everything including the pandemic, supply chain issues, chip shortages, and now gas prices are making people want to trade in their cars for a better gas economy.
“We are seeing quite a big demand. We are seeing clients that are in trucks and are going back to work have longer commutes. They are looking at Hondas to get better fuel economy and mileage," said Idell.
“A lot of people are wanting to sell their trucks or SUVs and everybody wants a Tesla or Prius, so where we were paying really top dollar for trucks like two or three months ago we are now paying 20% over blue book value for Prius, Teslas, anything that’s good on gas mileage," said Chris Wesnui, McCarthy's general manager.
According to Edmunds, used car and truck prices are adding to the surge of inflation with the average used car now costing $29,000 that’s up 37% in the last year. Idell says they are buying two or three cars daily from customers.
“If you have a car right now, your vehicle has never been worth more with the inventory being a little light most manufactures used car values are stronger than ever," said Idell.
McCarthy's general manager says he’s seeing more people turn to buy used cars instead of new ones.
“Supply and demand you know when everyone is in the used car market there are only so many used cars available. We have many people come in and we give them quote on their vehicle and they’re like that's more than I paid for my car three or four years ago," said Wesnui.
Although inventory has been low for Sunset Honda, they say they have been able to keep up with customer demand.
At McCarthy's, the general manager says these past two years have been the best for his business as he sees more people turn to buy used cars.