What Low New-Car Inventory Means for You

Posted: August 16, 2010

For most of 2009, car dealers had more cars than they could sell.  Now, the opposite is true.

"With Ford, General Motors Co. and Chrysler Group LLC kicking a decades-long habit of building more cars than customers want, dealers are howling that they can’t get enough models to drive sales back to pre-recession levels," reports  Businessweek. "This newfound discipline preserves the automakers’ profit per vehicle and draws praise from investors. At the same time, it cuts retailers’ volumes."

Beu Boeckmann, a dealer in Los Angeles, told Businessweek, “I couldn’t sleep a year ago because I thought, ‘We have a year’s supply of these cars!’ And now I’m worried about our inventory again because we don’t have enough.”

If you're shopping for a new car, getting the one you want can be challenging, given how limited inventory is. Kicking Tires says, "SUVs and other recently launched vehicles are hard to catch on a lot before they're sold. The 2010 Chevrolet Equinox and 2010 GMC Terrain only take 14 to 15 days to sell, even though July's average number of days it took for a car to sell was 56 days, which is down from 83 days in July 2009. Chrysler’s new 2011 Jeep Grand Cherokee is flying off of dealer lots (nine days). In fact, more than half of the fastest sellers in July came from GM, Chrysler or Ford."

The decreased output has another affect on consumers: smaller inventory lessens the need for automakers to offer discounts and incentives to sell cars.  That means that car buyers will be paying more for new cars and may not be getting the exact combination of features and options they want. 

Analysts see the trend of limited inventory continuing for some time. If you're in the market for a new car, it's still possible to get the car you want.  Just know that the incredible discounts of the recent past are pretty much over.  Instead, check out what other buyers in your area are paying for the car you want using our U.S. News pricing data.  It's available with every new car review on the site, and is a great negotiating tool.  Then, if the car you want isn't on the dealer's lot, you might want to consider asking for a dealer trades (where a dealership trades some of its inventory for the exact car a customer wants at another dealership), or even ordering the car from the factory.  You may have to wait a while, but you'll get the car you want. Finally, be sure to arm yourself with the current new car discounts and incentives automakers are offering.

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.

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