December 6, 2021

Car factory closures boost demand for used vehicles

Colin Spencer/staff reporter

Jesse Dovi, an owner of Dovi Ford in Cortland, strolls past the Ford Escapes on the lot Tuesday. Car dealerships face a shortage of new cars because the coronavirus pandemic shut down factories earlier this year. That has led to price increases on used cars.

In the front lot of Dovi Ford on Tompkins Street in Cortland, about 30 cars, almost all Ford Escapes, sat parked next to each other Tuesday.

About this time last year, about 200 cars wrapped around the dealership’s lot, coowner Jesse Dovi said.

“This is the lowest amount of cars on our lot since 2011,” when the dealership sold fewer cars, Dovi said.

The coronavirus pandemic has resulted in a supply shortage for new cars at dealerships in Cortland and across America.

For about three months — Mid-March to late May/early June — almost all automakers’ factories were closed down because of the coronavirus pandemic, Dovi said. Factories started reopening and producing new vehicles in early June, but still haven’t gotten to the rate to meet the demand of buyers, which has remained about the same as it was pre-pandemic.

This has pushed up the demand and consequently the prices of used cars and trucks at dealerships’ like Dovi’s.

“No matter what dealership a person goes to right now, there’s a lot less inventory,” said Todd Caputo, the president and owner of Sun Auto Group.

Caputo, who has dealerships in Cortlandville, Cicero, Chittenango and Elbridge, said used car and truck prices are up about 20%.

Car and truck auctions as well are having a hard time getting vehicles, too.

“Online dealer-to-dealer auction site ACV Auctions saw a tremendous jump in its used-car business” after factory closures in March and April, according to a Sept. 13 report in Car and Driver. “The company said in July that one reason for this boost was the fact that dealers could use the ACV website and other digital tools to procure used vehicles for their lots without having to go to auction lots since, just like shoppers, some dealers are trying to minimize their person-to-person exposure.”

On the lot of his Used Car King store on Route 281 in Cortlandville, Caputo said he only has about 60 cars available for purchase, about half of what it was this time last year.

Making things harder for potential buyers, a lot of cars that come to the lot have already been pre-purchased online, a medium the dealership offers that has become more popular during the pandemic.

“It just makes the car-buying process a lot more efficient and safe” to purchase online, Caputo said.

It also helps people save time.

Dovi said his dealership is continuing to buy used cars to help meet the demand, but is also waiting for the new car inventory to return to where it was.

“Eventually, the manufacturers will get new production to where it’s sufficient,” he said.

Caputo also said that his dealerships are working to buy used cars.

Both expect this trend to last throughout the end of the year.