Cars Today, Bicycles Tomorrow

Recently I had a good conversation with a very knowledgeable associate at a Toyota dealership near me. Any time I run across someone who knows stuff about things I know nothing about, I try to listen closely and take notes.  I went to the dealership because sooner or later, and probably sooner, I think I might need to have a new vehicle. I learned that getting a new one will likely be a serious challenge over the next few years.  The lot out front for vehicles for sale was practically deserted. The inventory they had was parked out near the road so those driving past could see that there was something there. Several rows between that line and the showroom building were completely empty. Other dealerships nearby had done things a little differently. They had about the same number of cars available, but had scattered them over the entire lot so as to avoid planting the idea that they were going out of business. I’m not sure which approach was better. Seeing dealer lots not jammed full of both new and used inventory was a new experience for me. I can’t recall a time like this. 

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Where I come from we call this a seller’s market

Inside, the sales associate welcomed me and sat to talk. There were other salesmen around, but they had no customers, either. He was cordial and on the level. He wasn’t making anything up and he wasn’t trying to impress anyone or talk down to me. I asked him about when to trade a car, but the conversation quickly went to the current situation.  There was a white board closer to the office. It held a list of the new cars actually available on the lot. Most of them were full sized SUVs. Those cars started at $37,000, and most of them were considerably more than that. He soon told me that the next day was going to be Allocation Day for the week. On that day he would learn what, if any, cars would be allocated to the dealership. He spoke of the day with a sense of resignation. When the list came in, some people waiting for vehicles would get one, but most would not. There’s a waiting list of people who want specific cars as soon as they’re available. Those who would drive something new this week had been on the waiting list for three months or more. They had moved to the front of the rather long line. Is it still possible to negotiate the price of a new car, I asked? Without hesitation, he said no. This dealership now sells all their vehicles at MSRP, with no dickering. There is so much pent up demand, and so few new vehicles available, that anything that comes in is quickly sold at the dealer-determined price. If a car came in for me and I decided I’d try to bring the price down a bit, even if just for sport, they’d call the next guy and he would take it. Where I come from we call this a seller’s market. The phrase that often goes with a seller’s market is ‘take it or leave it.’  The only place there is still some negotiating room is when trading in your old car. Because they’re in such high demand, dealers are eager to get them. But there may not be much room there, either. Try your luck, but the dealerships are sitting in the driver’s seat on this one. They know every new car arriving on the lot can be easily sold, with or without your trade. 

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Then my salesman friend had more bad news

How has this happened, all at once, you ask? His answer was complex. There are many factors in place to bring about this unique situation in the car market. It happens there are all kinds of shortages. Everyone has heard about a shortage of silicon chips for automotive applications. The new automatic features like lane minding, crash monitoring, automatic braking, and all the other electronic gizmos require additional chips and lots of electronic switches and a great deal of wiring. Remote start and electronic key? Yep, more chips. There’s a shortage of magnesium, the lightweight, strong, silvery metal that is widely used in our cars and throughout our society. Where does most of the magnesium come from? China first, Russia, and then a couple of steps down is Ukraine. Yep. Isn’t there something else going on in Ukraine? I was hearing a lot about that until the last few weeks. Hmmmmmmm. . . . There are rare earth minerals that go in the catalytic converters and in a host of other equipment and into the machinery that makes the parts. There’s aluminum. There’s titanium. There’s abracadabrium. Don’t see much of that these days. Cars are loaded with plastic parts, and the oil that plastic is made from is sky-high. Tires are at a premium, and these days it seems like most of them are imported. There are still supply chain issues that are unresolved. Help is hard to find everywhere. I began to wish I had just stayed home. Then my salesman friend had more bad news. Then there are the battery problems. More and more cars have hybrid systems which take bigger than normal batteries along with very complicated electronic components and even more wiring. With all the hype being used to push people toward electric cars, and with threats from government to crush the oil and gas industry, fully electric cars are at a premium also. At this point I asked who was benefiting from all this chaos? It isn’t just a question of benefiting, but also who is adapting to the new situation faster, he said. The car companies don’t have hundreds of vehicles unsold at every dealership. They like that. The dealerships don’t have to haggle over prices, and they like that. People with plenty of money are getting cars, even if they have to wait a bit. Many customers and lots of potential customers don’t like it so much. Instead of hunting for a bargain, good fortune means finding anything at all. The car companies like being in the driver’s seat on all of this. They want to sell everything that gets built and not have to mess with so many customers, and they like doing it on their terms. 

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My friend told me that the day of the $5000 used car is gone

Interested in an electric car? I was told that Ford already requires all electric vehicle sales to be conducted online. They must have seen those Carvana ads and decided they’d like people to just put a new electric car on their credit cards. Like groceries and COVID tests, just pick a crossover in the color you like online and have it delivered! Make sure when they drive up out front somebody explains how to use your smartphone and your multiple credit cards to open the doors and start it. Don’t worry, only really hip IT people could ever steal one. You’ll barely be able to drive it yourself, which is good, because that new car would rather drive itself. It won’t be long before new cars have plenty of attitude, and not just on days when roads are slippery. So you say that, having heard all of this and noticing that your anxiety level has gone way up, you’ll just look around for an economy used car and wait out the present chaos? Too late. My friend told me that the day of the $5000 used car is gone. That was a wake up call right there. What he meant was that $5000 cars, you know, really cheap ones, were scarce as hens’ teeth. The shocking news was that $5000 for a used car is considered cheap. What did I miss? How long was I asleep? I bought the best car I ever owned, brand new, for $5700 in 1987. The last new car I bought was in 2005. Someone I know bought one last in 2014. I think I can sense a trend coming on.  My sales friend expressed genuine concern for people in low-paying jobs. How is somebody working at McDonald’s going to be able to afford a car to get back and forth to work? I hadn’t thought of that. Will there be shortages of Big Macs and Dave’s singles because the people who used to work there are just staying home because their cars dropped dead? Parts for repairs are taking ages, too. It’s something to think about. There are plenty of people who work in grocery stores and quickie marts in the same boat. 

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I’m likely to have to hang on to my present vehicle for a while

The lesson I took away from this conversation was that I’m likely to have to hang on to my present vehicle for a while. I like my present vehicle, and that’s good, because we’re going to be depending on each other for quite a while. I’ve never had an engine rebuilt, but it may be time to stockpile some needed parts for just such a scenario. I intend to do a better job of maintenance and changing fluids in the hope that we can all go the extra miles that lie ahead.  The kindly salesman said he expects the current situation to continue for two or three years, and he said he knows people who think it will never go back to the way it was before. I fear that the people he knows may be right about that.  So we better take good care of the old bomb out in the carport. And when was the last time you oiled the chain on your bicycle?

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