Sonoma County car buyers facing less inventory in new, used vehicles

Supply chain issues have hampered the delivery of new cars as a result of the pandemic.|

Jim Bone gets a glimpse of the global supply chain crisis every time he looks at the lots of his two Santa Rosa car dealerships.

On a recent afternoon, his Kia business had 12 new cars on the lot when he would typically have 100. His Nissan lot, which in good times has 140 new cars, had 22.

“Sales are not up by any standard, but only for the reason that we don’t have any cars,” Bone said.

With such short supply, local dealers are advising prospective shoppers to be cognizant of the scarcity of selections of both new and used cars and keep an open mind. Buyers looking to get a vehicle quickly may have to compromise on the color or options. For electric vehicles, be prepared for a waiting list.

It’s a classic case of tight supply and continued strong demand, playing out on a global scale. But the situation affecting the auto market is complex, driven by shortages of key components such as semiconductors and wiring harnesses; a dip in factory production because of COVID-19 outbreaks or health protocols; and shipping woes that have container ships carrying cars, parts and other goods backed up all along the West Coast, waiting to be docked.

“Take all those, then add them up and we've had our challenges across all brands,” said Justin Hansel, vice president of his family’s business of eight dealerships and manufacturers such as BMW, Honda, Toyota and Ford under the Hansel Auto Group portfolio.

That shows up on the new car registrations that are tracked in Sonoma County by Experian, the credit reporting agency. There have been 13,571 such new car registrations in the county from January to September, according to Experian. That is a 21% increase from last year, when sales were hampered by dealerships essentially being closed for a few months during the spring with the economic uncertainty over COVID-19. A more apt comparison would be 2019, which had 13,680 new car registrations, through the same time period, which is slightly more than the 2021 rate.

The tight supply also has affected used cars, continuing a trend of more than a year bottleneck on their availability. That was first sparked when wholesale auctions for used vehicles were halted temporarily at the onset of the pandemic. That has lingered as rental car agencies are holding onto their inventory as opposed to selling their vehicles because they do not want to be caught with less inventory, especially as tourism has rebounded this year.

“No one is selling used cars at the rental companies right now,” Bone said. “If you search rental cars in tourist areas such as Coeur d'Alene (Idaho) or Jackson Hole (Wyoming), you pay as much as $500 a day for a rental car.”

Meanwhile, there is still demand from consumers even as prices have not dropped and in some cases have increased. “We've seen vehicle prices increase, in some cases, as much as 30%. So, a car that would cost $15,000 in that example, would cost you $20,000,” said Tom Hubert, the senior vice president of auto, insurance and wealth services at Redwood Credit Union.

Redwood Credit Union’s average loan amount this year is $32,643. Besides being the top local provider for auto loans in the area, Redwood also has a popular auto lot in south Santa Rosa where it sells cars to members and non-members. That facility has about 50% less inventory than it typically would have as a result of the supply crunch, Hubert said.

Those buyers also are being less choosy than normal given the more limited supply, he said. “Folks have gone in with a broader acceptance of what's OK. They are OK with different colors rather than narrowing it down to a single color or single interior. They're more open to different options because those are the options that are available,” Hubert said.

“But demand is still there. People still need cars, that’s for sure,” he added.

That’s the case at Community First Credit Union in Santa Rosa, which so far this year has seen a 30% increase in auto loan volume compared to last year, said David Williams, spokesman. The overall total is $151 million in vehicle loans made through September.

The average loan amount is at $34,231 for the credit union. To make monthly payments more affordable, the average loan is now at 80 months for Community First. A few years ago, the average loan would be for five years and then it later crept up to six years, Williams said.

“People are stretching out their payments to keep their payments about the same (level),” he said.

The inventory levels will gradually improve in the new year, Hansel said. But he noted that buying habits have changed during the pandemic with more consumers preferring to shop online and some even requesting that their purchased automobiles be delivered to their home — a change that Hansel predicted is here to stay.

“I think there are more buyers who are willing to customize, build and wait,” Hansel said. He specifically cited the new all-electric Ford F-150 Lightning truck that will be produced next year. The Detroit automaker has already allowed $100 deposits to be placed on the vehicle and such reservations have been off the charts, he said.

“It's just mind-blowing to see the number of reservations to Ford dealerships we have,” he said of the electric F-150. “Electric is our market, I think we knew was going to be strong. But it is stronger than we anticipated.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or On Twitter @BillSwindell.

Bill Swindell

Business, Beer and Wine, The Press Democrat  

In the North Coast, we are surrounded by hundreds of wineries along with some of the best breweries, cidermakers and distillers. These industries produce an abundance of drinks as well as good stories – and those are what I’m interested in writing. I also keep my eye on our growing cannabis industry and other agricultural crops, which have provided the backbone for our food-and-wine culture for generations.

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