The automotive industry has been carving out a new road since the time when the COVID-19 pandemic began, as it has affected each area of the business, including dealership inventory.
A twist nobody expected: Inventories for both new and used cars are inadequate, resulting in rising prices. Dealerships are competing with each other to fill their lots with vehicles or find specific cars asked for by car shoppers. And dealerships are literally shopping around for leased vehicles.
"They're being contacted right now and being told: 'You can sell that. We will not just pay the buyout price. We'll pay all your payments and hand you a check on top of that," Ivan Drury, senior manager of Insights at Edmunds, told Business Insider. "Dealers are very desperate for inventory. They're willing to make those payments, pay that buyout price and get that piece of inventory back."
Dealers are offering to purchase leased vehicles for high markups, Drury explained.
He told Business Insider, "You actually stand to make money in that situation because supply is just so drained. There's a lot of power for someone who currently owns a vehicle."
According to Cox Automotive, new-car inventories were less than half of 2019 levels in June of 2021.
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