Sam Hight feared the Hight Family of Dealerships potentially overbought when showrooms shut their doors during the height of the coronavirus pandemic in March.

But now, driving by a Hight lot, the company’s part-owner sees a striking result as online purchasing skyrocketed and took a once plentiful inventory to today’s “surprisingly low” state.  

“It looks like we’re almost closed,” Hight said.

Car manufacturers paused production at the height of the coronavirus pandemic, leaving dealers with abnormally low inventories. Finding vehicles sometimes proved to be an insurmountable challenge.

Dealers across central Maine say their inventory crunch is real, but are starting to see signs of improvement. They say sales are picking up, as is in-person car servicing at some of the bigger dealerships.

“Sales are down from a year ago, but better than we were expecting,” said Adam Lee, president of Lee Auto Malls that have used car locations in Augusta, Oakland and Newport. “We’re not complaining.”

The anecdotal reports of low inventories are in line with national data from a study recently released by Cox Automotive. 

Tom Brown, president of the Maine Automobile Dealers Association, said car manufacturers are now catching up after factory closures, but run into the same problems as everyone else in the midst of the coronavirus pandemic. Production is just not as high, and cannot be with social distancing and other protocols.

“Their supply is lower than it usually would be because if your manufacturer is not building any, they can’t ship you any,” Brown said. “For that reason the dealer’s inventory is less numerous than they would be in an otherwise normal year.”

HOW CENTRAL MAINE DEALERS ARE DOING   

Showrooms across the state reopened May 1 as long as they remained in accordance with mandatory health and safety requirements. 

Dealers around the state are looking to other dealers, both in and out of state, to find the cars their customers want. According to data presented at the State Revenue Forecasting Committee in late July obtained by the Morning Sentinel, auto dealer and lease sales tax were down 8.2% year over year from January through June 2020.

Inventory across the Hight dealerships is at 25%-35% of “normal” levels for new and used vehicles. One Hight store has fewer than 20 vehicles on the lot. 

Tim DiBenedetti of Charlie’s Motor Mall, which operates seven dealerships in the Augusta area, estimated new and used inventory is down about 30%, but it is enough to operate. Used car trade-ins also add to Charlie’s inventory.

At Lee, new car inventory is about half of normal rates. The selection is smaller across Lee properties statewide, but as one of the state’s largest motor vehicle operations, it is not running out of cars. Most popular models are still available, just not an abundance of them.

“Normally you’d pull in and see 80 Jeep Grand Cherokees on the lot. Now you only see 40,” Lee said. “Most people are only looking to buy one. We may have slightly less of a selection, but fortunately, we’re large enough.”

Chris Gaunce, who owns Central Maine Motors Auto Group in Waterville and operates three dealerships, said that after a lull, they are seeing inventory come back at a faster rate.

“We’re by no means fully stocked at this point in time, but we’re finding ways to put stuff together to take care of consumers’ needs.”

THE LITTLE DEALERS 

Used-only car dealerships “are in the same boat” as those that specialize in new cars, said Zach Wentworth, manager of Wentworth Motors in Waterville. Inventory is low, low, low.  

Wentworth traditionally stocks 30 cars on its College Avenue lot, but Zach and his father, Bruce, the dealer’s only two employees, see about five cars out their office window.

They are buying within a 500-mile radius, which is normal for the dealership. Zach Wentworth said he is paying closer attention to what other dealerships have. The company watches two online auctions in Maine and two nationwide auctions each week. 

“It’s like impossible to buy cars right now. Well, you can buy them, but the prices are very high,” Zach Wentworth said. “Just keep looking is all we can do, keep trying to buy.” 

Kevin Keene, owner of Maine Avenue Auto Sales in Farmingdale, said he bought a large inventory of used cars earlier in the spring. He said there’s been a shortage for years, but the coronavirus pandemic made everything worse.

“Numbers at auctions are down,” Keene said. “Auctions that would normally have 1,500 cars are down to 900 cars. There’s just a really short supply.”

Gaunce traded with new car dealers from as far away as New York and also across New England. For used cars, the Central Maine Motors team looked at online auctions as far away as Michigan and Pennsylvania. They are also buying cars from people off the street.

WHEN THE PANDEMIC HIT

“We had been working fairly aggressively at becoming more online-focused, so when everything came to pass for closures and stuff, our adjustment time was very short,” Gaunce said. “We were able to keep moving forward and meet consumers’ needs. Every day was an adjustment.”

Charlie’s Motor Mall did not have any layoffs.

Lee Auto Malls furloughed 220 of the company’s 450 employees for about a six-week period.  Showrooms were closed, the business changed. Lee covered health insurance for all furloughed employees.

“At that time it was scary. We didn’t know. What if we had to furlough more people?” Lee said. “We did everything we possibly could to help people.”

All are either back or received offers to come back.

Overall sales totals are down at the Hight Family of Dealerships, but not as much as the self-described “doomsday-er” would have anticipated. None of the company’s 100 employees were laid off, nor did they receive any sort of pay cut. 

“I was fearing for the worst, and it hasn’t happened,” Hight said. “I get surprised every day.” Gaunce, of Central Maine Motors, echoed that statement. 

Lee said that despite lower inventory, May, June, July and August sales are up.

Despite the economic downturn caused by the pandemic, car dealerships adjusted their models to succeed.

“Business is booming,” DiBenedetti said. “We’re always busy this time of year, but I suspect a lot of people aren’t going on the vacations they planned, doing stuff they planned, so they have a little more money to upgrade their vehicles.”

THE EFFECT ON CUSTOMERS

For those with the financial means to purchase a car, now is a time to score a deal, as long as they are not too picky. Shoppers can take advantage of lowered prices, historically low interest rates and financing help. Lee described them as “aggressive incentive programs.” 

“It does have a serious impact on your payment,” Lee said. “That drives sales.”  

Now, there’s a caveat. Dealers have to actually find the desired vehicle, which often proves a challenge. Dealers look within their networks to find other showrooms — sometimes out of state — with the cars buyers desire. Color selection is usually limited, but the finances are in the customer’s favor. 

“As a consumer, if you feel able and willing to buy a vehicle, it is a good time to buy,” Hight said. “It’s just getting harder and harder to find what you want. If we find the vehicle, it makes a lot of sense.” 

Since the pandemic hit, online transactions have become more the norm.

Central Maine Motors does roughly 15% of its transactions online. It was about 5% before that. Oftentimes salespeople are going to consumers’ houses to complete paperwork. They do much of the transaction online, but there are certain signatures required by the state to be “wet signatures” done with a pen.

“It’s allowed us to be more responsive to their needs and what they want,” Gaunce said. “What’s been a challenge is just showing them how to use their car because there are so many electronic features on these things today that it requires two people to learn. Consumers have been accepting to it, patient with it.”

The summer months are always busy at Charlie’s. This year is no different as online interest soars.

“I would say we’re getting a lot more internet leads than we were before,” DiBenedetti said. “A lot more people are going online and discussing the transaction before they come in.”

The situation for a totally used car dealership is a bit different, especially for a small family-owned one like Wentworth’s.

“(Customers) are going to get a high trade-in value, but at the same time they’re going to pay more for the vehicle because of supply and demand,” Zach Wentworth said. 

The outlook moving forward is hopeful that supply will soon catch up to demand.

“The manufacturers, I think every one of them have three shifts going,” Lee said. “The lots in the next three months will start to fill up again.”

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