Sonoma County car buyers face lower inventory of new and used vehicles

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Jim Bone gets a glimpse of the global supply chain crisis every time he looks at the lots from his two Santa Rosa car dealerships.

On a recent afternoon, his company Kia had 12 new cars on the lot when he would usually have 100. His Nissan lot, which in good times had 140 new cars, had 22.

“The sales are not up to par, but only for the reason that we don’t have cars,” Bone said.

With such a limited supply, local dealers are advising potential buyers to be aware of the scarcity of new and used car selections and to keep an open mind. Buyers looking to get a vehicle quickly may have to compromise on color or options. For electric vehicles, be prepared for a waiting list.

This is a classic case of tight supply and still strong demand, taking place on a global scale. But the situation affecting the automotive market is complex, driven by shortages of key components such as semiconductors and wire harnesses; a drop in factory production due to COVID-19 outbreaks or health protocols; and the shipping problems of container ships carrying cars, parts and other cargo backed up along the west coast, waiting to be moored.

“Take it all, then add it up and we’ve had our challenges across all brands,” said Justin Hansel, family business vice president of eight dealers and manufacturers such as BMW, Honda, Toyota and Ford under the Hansel Auto group. wallet.

This appears on new car registrations that are tracked in Sonoma County by Experian, the credit reporting agency. According to Experian, 13,571 of these new car registrations were recorded in the county from January to September. This is a 21% increase from last year, when sales were hampered by the closing of dealerships for a few months in the spring due to economic uncertainty over COVID-19. A more appropriate comparison would be 2019, which had 13,680 new car registrations, during the same period, which is slightly higher than the rate in 2021.

The tight supply has also affected used cars, continuing a trend of more than a year of bottlenecking their availability. This was first triggered when used vehicle wholesale auctions were temporarily halted at the start of the pandemic. This has persisted as car rental companies keep their inventory instead of selling their vehicles because they don’t want to be taken with less inventory, especially as tourism has rebounded this year.

“No one is selling used cars in rental companies right now,” Bone said. “If you’re looking for rental cars in tourist areas like Coeur d’Alene (Idaho) or Jackson Hole (Wyoming), you’ll pay up to $ 500 a day for a rental car.”

Meanwhile, there is still consumer demand even though prices have not gone down and in some cases have gone up. “We have seen vehicle prices go up, in some cases, up to 30%. So a car that would cost $ 15,000 in this example would cost you $ 20,000, ”said Tom Hubert, senior vice president of auto, insurance and wealth management services at Redwood Credit Union.

The average loan amount from Redwood Credit Union this year is $ 32,643. In addition to being the leading local auto loan provider in the area, Redwood also has a popular car fleet in southern Santa Rosa, where it sells cars to members and non-members. This facility has about 50% less inventory than it typically would due to the supply shortage, Hubert said.

These buyers are also less demanding than normal given the more limited supply, he said. “People came in with a wider acceptance of what is good. They are OK with different colors rather than narrowing it down to one color or one interior. They are more open to different options because those are the options available, ”said Hubert.

“But the demand is still there. People still need cars, that’s for sure, ”he added.

This is the case of Community First Credit Union in Santa Rosa, which has seen a 30% increase in auto loan volume so far this year compared to last year, said David Williams, spokesperson. The overall total is $ 151 million in auto loans made through September.

The average loan amount is $ 34,231 for the credit union. To make monthly payments more affordable, the average loan is now 80 months for Community First. A few years ago, the average loan was five years, and then it climbed to six years later, Williams said.

“People are stretching their payments to keep their payments roughly at the same (level),” he said.

Inventory levels will gradually improve over the new year, Hansel said. But he noted that shopping habits have changed during the pandemic, with more and more consumers preferring to shop online and some even requesting that their purchased cars be delivered to their homes – a change which Hansel says is here to stay. to stay.

“I think there are more buyers who are willing to customize, build and wait,” said Hansel. He specifically cited the new all-electric Ford F-150 Lightning truck to be produced next year. The Detroit automaker has already authorized the deposit of $ 100 of deposits on the vehicle and such reservations have been off the charts, he said.

“It’s just mind-blowing how many Ford dealership reservations we have,” he said of the electric F-150. “Electricity is our market, I think we knew it was going to be strong. But it’s stronger than expected.

You can reach editor Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.

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