Dealers facing inventory shortages

Many car buyers are well-informed on the process of acquiring car loans, but most don’t realize that dealers need loans too.

The vast majority of dealers can’t afford to pay for the cars that they sell out of pocket. So they take out their own car loans in order to finance their inventory. But dealers’ bad credit troubles, coupled with a shortage of vehicles and a rise in demand, is leaving auto lots dried up, according to the Washington Post.

In general, Americans are returning to dealerships, and popular models are going fast.

Yet automakers are “not sure the recovery will last and not sure of the dealers’ ability to get credit,” Thomas Stallkamp, former Chrysler president, told the news source. Many of them also slashed production during the recession and are now struggling to increase their production.

Bloomberg reports that one Ford dealer in California recently requested 100 units of the new Ford Fusion, yet only received seven. Other dealers across the country are reporting similar problems – not in selling vehicles, but in acquiring enough vehicles to sell.

The trend is a dramatic turnaround from 2009, when many dealers were flooded with models left over from the high production rates before the recession hit. Yet now they barely have enough cars to meet demand.

The particular model that a driver is looking at may not be there tomorrow. That’s why drivers may want to apply online for a car loan today.ADNFCR-3500-ID-19924662-ADNFCR