Finding new cars on the lot is getting easier

New vehicle inventory is up an estimated 62% from last year as some supply roadblocks clear. But higher prices may stick.

General Motors told Wall Street on Tuesday that it made $3.3 billion in profit this past quarter — despite rising interest rates on auto loans and the generally grumpy mood of the American consumer. Key to that profit? The maker of Cadillac and Chevy said cleaned-up supply chains allowed it to deliver more cars to dealerships.

New vehicle inventory is up 62% from last year, according to Cox Automotive. For the first time since the pandemic hit, many car dealerships actually have new vehicles on the lot they can sell you.

Last year, if you wanted to test drive a new GMC Sierra pickup truck in Colorado Springs, Colorado, you might have thought the Alpine Buick GMC South dealership would be a logical place to look. 

You would have been disappointed. Actually, if you were looking for any new car on the lot, you would have been disappointed. 

“There was a point last year where we had zero inventory on the ground,” said general sales manager Steve Eling.

Things are better in 2022, he said. He can swap out the used cars at the front of the lot with new models.

“Things have increased. Where we were negative-days supply before, just taking orders on vehicles, we’re about a 25-days supply at this point,” Eling said.

That’s still well below the 100-day supply he had before the pandemic, but it’s trending in the right direction. 

“If you are in the market for a Jeep or a Ram pickup truck or an SUV or truck from one of the domestic automakers, you’re going to see more inventory than you’ve seen in a while,” said Michelle Krebs with Cox Automotive. 

American carmakers like GM have, for the most part, figured out the semiconductor shortage that screwed up their supply chains, Krebs added.

As for foreign cars, “if you’re shopping for a Honda and even a Kia or a Toyota or Subaru, you’re going to see very skimpy inventory,” she said.

That’s because some automakers are running into new supply chain woes tied to China and Southeast Asia, according to Krebs. 

It’s bad news for drivers who prefer a sedan to a pickup truck. Detroit just doesn’t do small, as those cars aren’t the moneymakers. 

Eventually, more supply and cooling demand may mean that prices tip down, said Jessica Caldwell at the car site Edmunds. But don’t expect massive discounts. 

“I think consumers should get used to higher price points,” Caldwell said. “At least, once prices kind of increase, they generally don’t go back on a large scale.”

Last month, buyers on average paid about $348 above sticker price, according to Edmunds.