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GREATER LA
Why are new cars so expensive right now?
By
Benjamin Gottlieb Dec. 07, 2021
SMALL BUSINESS & ENTREPRENEURS
"Theo Ebert (right) and Lee Dibble stand on the empty new car lot at Vista Ford Lincoln in Woodland Hills.Photo by Benjamin Gottlieb.
Theo Ebert looks out at his empty new car lot in Woodland Hills.
“There's typically three rows [of cars] where we're standing,” says Ebert, the sales manager at
Vista Ford Lincoln. “Right now, we've got, what, five cars we're staring at?”
This dealership normally stocks around 500 to 600 cars this time of year. But right now, total inventory is just 100, including those five lonely cars in the middle of the sales lot.
Even so, business is booming, leading to sky-high prices on new and used cars, and even bidding wars for cars you don’t have to pre-order. “People come in and we get two or three [sales]-people working on the same car. … Whoever wants to pay the most for the car gets the car,” he says.
The global
supply chain issues stretching many business owners to their breaking points has actually been a boon for car dealerships all across Southern California. Most are seeing record profits despite significantly reduced inventory. Ebert says his dealership is running with lower overhead and fewer employees while demand is at an all-time high.
Theo Ebert points to a large whiteboard inside his office in Woodland Hills that tallies the number of cars sold per salesperson. Photo by Benjamin Gottlieb.
“We're making more money on less cars,” Ebert says. “Anyone that's in the car business that says they're not having a record year is probably lying to you.”
Business is especially good for some of the car market’s hottest cars, such as the new
Ford Bronco. Ebert says those cars can sell for $30,000 to $40,000 over asking price in some instances.
“So a $60,000 Bronco can sell for $100,000,” he says.
It’s a great situation for car dealerships but the exact opposite for car shoppers like Zoe Rosenberg, who is in the market for a new lease. She turned in her Toyota this past summer and held off on getting a new car.
“I was thinking about upgrading a bit, so I went to Lexus in August,” says Rosenberg, a freelance TV and film producer. “At the time, prices seemed about normal.”
But when she went back to check out the same car a few weeks ago, she says, “The lease price was $200 more for the same car.”
In order to keep the lot looking full, Vista Ford Lincoln often parks the cars it does have around the perimeter of its lot, sometimes (as seen here) horizontally." Photo by Benjamin Gottlieb
