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Car Buying After COVID: From the Vehicle Shortage to the Loan Shortage

by Admin - Posted 12 months ago

Even with the COVID pandemic behind us more than three years after its sudden start in March 2020, car buying continues to be affected. During the mass shutdowns, production of new vehicles came to a screeching halt. And without new cars to buy, people weren’t trading in their used vehicles at the same rate. Suddenly, used car dealerships were struggling to find enough inventory for their lots. And the vehicles they did have available for sale were now far more expensive than usual.


Thankfully, with car manufacturing back up and running, used car inventory shortages seem to be subsiding. However, used car dealerships are now faced with a new problem in offering loans to their customers for them to purchase vehicles.


A sign of the times


Just the other day, a customer visited one of our lots. She told us that she had spent the entire day car shopping with her infant daughter, and that she’d already been turned down by two of Greater Cincinnati’s largest used vehicle dealerships. The more we spoke to her, the less sense this made. She was a full-time employee in good standing with her company, making more money each month than what she owed for expenses. She even had several thousand dollars for a down payment. But she was turned away because her down payment was not high enough. Just a year ago, a customer with her job and income status would easily qualify for a late model vehicle in excellent condition.


Having been in business for more than 30 years, we can say that stories like this along with the big bank closures making headlines in the news, suggest that lending for used vehicles is tightening up. The companies that finance the large used car dealerships are becoming more and more reluctant to offer loans without higher down payments and/ or credit scores. And people like our customer are spending 7-8 hours test driving cars and filling out paperwork, only to be turned down for the loans they need.


A better option


At Cincinnati Auto Credit, we continue working hard to be a full-service operation no matter what. If you’re working full time and have income, chances are excellent that we’ll say “yes” to your loan. And we’ll never waste your time by giving you test drives in cars that you can’t purchase today. We always start with a credit application before presenting you with a selection of vehicles in your price range. Most customers are heading home in their new ride within minutes of their test drives.


So if you’re in the market for a new-to-you vehicle, we hope you’ll stop by one of our locations today and give us a chance to give you a chance!