The supply chain is affecting more than just new car inventory and used car prices. It’s also affecting the repair industry. Obviously, you’ve seen new car dealerships with empty lots, both new and used, and you’ve seen the prices of used cars skyrocket. People need their car to drive and they can’t find a new one, so they’ll pay over the book value for a used one. It’s also showing up in the repair industry.
Whether at a dealership or standalone repair garages are having difficulty getting vehicles back on the road because they can’t get the parts. Parts inventory is extremely problematic. There are some parts that might be on a 2-4+ month backlog. Well, what do you do if your car is off the road during that timeframe? Here’s an article from TheDrive, stating that drivers are waiting months for simple car repairs due to part supply problems. As one example from the article, it says a person was involved in a minor fender bender. He took the vehicle straight to the body shop, but the mechanic told him that they have such a backlog that they couldn’t even look at the car for a month and a half. Luckily the damage was minor and the car was still drivable a month later while the car was at the garage the parts finally made it.
This is a common thing for collision parts and for mechanical parts. Even some electronic parts are having difficulty being sourced and the repair shops say they’ve never seen this so bad. The same article above references a 26-year veteran of the parts business. He’s a manager at a dealership/family-owned repair center and says the situation is the worst he’s ever seen, and there’s no ETA for when the parts will be available. As an example, he had a Ford F-150 sitting for four months waiting for a part. People are having to find rental cars and borrow rides from others. So what does that mean if you have a vehicle that is your main mode of transportation? Be very careful about operating the vehicle. A minor collision, if the car’s not drivable, can literally take you off the road because that part if it’s not available, can’t get fixed in a short period of time like used to be the case. Additionally, there may not be many rental cars available.
The next time you’re driving and you go past an auto rental business look for their inventory. Look specifically for Enterprise Rent-A-Car because most of the other rental companies are at airports and the other franchises like Hertz and they normally don’t have their vehicles on display. They usually have inventory staged in a back area and they have their office in a strip mall but you can’t see the cars. Enterprise Rent-A-Car is a little different, most Enterprise Rent-A-Car businesses have their vehicles in the front parking lot.
The next time you drive by see how many vehicles are there. Try to look at that on a regular basis. What you’ll find is they may have a few vehicles in their lot occasionally, but you may drive by some days and have zero vehicles in their inventory. Do a search online to see what vehicles are available for rent. You may find that there are no vehicles or they cost upwards of $100/day.
Well, your transportation is something you count on every day. Many things can take that transportation away. It could be a collision, it could be a mechanical problem, but if the parts aren’t available to fix it, you’re out of luck until they come in. We have clients that have very minor mechanical problems things as computers not working or a small brake problem and the part wasn’t available. This parts shortage has no ETA according to the article and it might actually get worse. Why is that?
Every vehicle that’s on the road today or 90% of them are internal combustion engine vehicles, gasoline or diesel vehicles. They run on fuel from the gas station that burns up and makes the car drive. 5-10 years from now, vehicles are going to be all-electric. You’ve seen the articles and governmental support and incentives that are driving the switch over to electric vehicles. What that’s done is it’s created a transition for manufacturers. Most automotive manufacturers have taken away all new engineering and development for gasoline vehicles, all their new development is electric vehicles. The pipeline of vehicles that are internal combustion engines is evaporating. They’re not making any more. They’re not developing any new ones. Certainly, they’ll still manufacture the current version for a few years, but they’re not putting any new money into supply chains or factories for these legacy older vehicles.
What that means is the parts are not going to be in high supply either. If manufacturers are not building the vehicles for sale through dealerships, they’re also not building a lot of extra parts. Most parts for vehicles come as an overbuild of parts that are manufactured for the actual vehicle. So if you’re building let’s say Ford F150, you build a million Ford F-150s and you might have a hundred thousand worth of vehicles with extra parts like 10% overage. So you have those parts for people that need them. If you’re not going to be building the vehicles, why build the extra parts? A lot of those parts are going to go to waste. So the manufacturers are already starting to pull back on parts production. So you may find that this parts crisis may actually get worse.
In the coming years, you may find that legacy vehicles on the road right now have a parts problem that never gets solved. What does that mean for you? If you have a vehicle that’s more than 2-3 years old, you may find that in the coming years there are no parts available for the vehicle. It’s like Cuba, where cars just get parked and they never get fixed. In the 1950s, when Cuba was embargoed, no parts could go to that island. The automotive business was frozen in time. Every vehicle on the road was like a time machine. There were no new cars, they were scavenged and parts were taken from one car to another. Now it’s probably not going to be that extreme, but it may be something where parts become more difficult to get. Unlike vehicles from the fifties or sixties or seventies where you can interchange parts, there’s a lot of complexity. Parts are now very specialized so if a vehicle is from the 2000s, that part may only fit one car. So if it’s not available you may not be able to interchange it from another vehicle.
Let us know in the comments what you think about this potential parts crisis and how it’s going to affect the usage of vehicles in the future that are currently on the road.
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A lien release letter for a car is a document that officially declares that the lien on your vehicle title has been removed and you will be free to take action with your vehicle. This document removes any restrictions on what you can do with your car. A person is typically eligible for a vehicle lien release when the loan on the vehicle has been paid back to the lender.
Your lender, who has loaned you money to purchase a vehicle, places a lien on your title until the loan is paid off in its entirety. A lien is a claim on the property for the security of payment. When a lender loans a borrower (you) money to purchase a vehicle, they want to make sure that they are paid back plus interest. Your lender, also known as your lienholder, will remain printed on the front of your vehicle title until the loan is paid off. A lien on a vehicle title is a cloud on the title that places a hold on ownership; once it’s paid off, you can get a title for your car or you can sell it or trade it in.
The process of filing for a vehicle lien release will vary depending on your state, your situation, and your lender. However, the lien release process typically consists of the following four steps:
Step 1: Identify your lienholder
Step 2: Compile your lien release letter and non-interest letter
Step 3: Mail your lien release letter and letter of non-interest through certified mail
Step 4: Obtain the signed lien release letter and apply for a clear title
When your lienholder has released the lien on your vehicle, you can take the lien release letter and the letter of non-interest to your state DMV for processing. Before you can receive a clear title for your vehicle, however, you will need to pay all registration and tax fees as well as any title transfer fees.
Typically, your lienholder is required to release your title once the loan has been paid. Unfortunately, that doesn’t always happen. Just because your loan is paid doesn’t mean that the lien has been released; you may still have to go through the vehicle lien release process and notify the DMV of the satisfied loan.
For more information and assistance, learn more about our vehicle lien release process.
So many things are different about electric vehicles. One thing is how you buy them. We saw the other day a company called Tenet that does a balloon program where you don’t have to finance the whole thing, you can hold some of it out to get a rebate from the taxes. Here today comes a company called Drive It Away that does subscriptions to vehicles where you’re not buying it, you’re not leasing it, you’re just paying for a subscription. And they have a financial plan that allows you to just drive the car and you can probably switch the car around too. The way they word it is, it’s an app that regardless of credit you can immediately start driving a new Bolt EV through a turnkey vehicle subscription. It includes insurance, maintenance service, and all the details you need to have a vehicle. This is a full plug-in electric vehicle.
This is the type of modern financial technology that’s going to be attached to new types of vehicles, electric vehicles, to make the ownership experience different from gasoline vehicles. These companies are realizing that electric vehicles are a rapidly growing segment of what people sell. The use of the vehicle might be nontraditional, you might not need it for three-four weeks. If you’re working from home you might not need it for a month. So that subscription allows you to use it for different intervals.
So be aware that not only are electric vehicles different in the vehicle architecture, but the ownership experience and payment structure might be different than traditional legacy ownership. Buying leasing money down interest rates. It might be a more app-driven experience like everything else in modern technology.
Why is it important to verify who you’re purchasing a used vehicle from? There are a lot of what’s called unlicensed dealers or curb stoners out there that are buying and selling cars over the internet. It’s a lot easier to do now than it used to be. curb stoners historically get their name because they used to have to sell cars from the curb. As an unlicensed dealer, they didn’t have a dealer lot or showroom to sell from. As a result, they would just have cars at their house on the curb. They would put an ad in the classifieds in newspapers, and sell these cars directly from the curb.
First of all, an unlicensed dealer is against the law. It is illegal to sell vehicles without a dealer’s license. Second, an unlicensed dealer has no regulating authority overseeing their business practices or their inventory. Without outside oversight to hold the “dealer” accountable, it’s highly probable that the vehicles for sale will have a variety of issues such as odometer tampering, certificate of destruction title, prior theft, or mechanical problems.
Odometer tampering is when a vehicle’s odometer is purposefully changed to reflect a lower mileage to increase the value of a vehicle. Odometer tampering is often found with curb stone vehicles due to the lack of regulatory oversight of each vehicle’s odometer. A dealer’s license is required to log the odometer of each vehicle on their lot, which is why it’s much less likely that a licensed dealership will have tampered with the odometer. Curb stoning is a state-level crime, while odometer tampering is a federal offense that carries hefty legal repercussions and possible incarceration.
Before purchasing a vehicle, investigate the dealer to ensure that they are properly licensed in your state. Most states require that to have a dealer’s license, you also have to have a physical location to sell your inventory. Call the dealership prior to visiting and ask about their licensing. Dealerships that are properly licensed have nothing to hide and will be more than happy to prove their status as a legal seller.
The dilemma of whether to purchase a vehicle without a title is a common concern that we encounter daily, with 700 to 800 calls inundating our lines. Many individuals contemplate the risks and uncertainties associated with acquiring a vehicle without a valid title. It’s crucial to understand that, in most cases, we strongly advise against buying a vehicle without receiving a proper title at the time of sale.
The primary reason for our caution is that there are numerous instances where obtaining a title for a vehicle without one becomes nearly impossible. Approximately 20 to 30% of the time, individuals who find themselves with a vehicle lacking a title encounter insurmountable obstacles in securing one.
It’s a common misconception that running a Carfax or a VIN check can unveil all potential issues with a vehicle’s title. However, these consumer-grade services are limited in their capabilities. They might not reveal crucial information, and the disclaimers at the bottom of Carfax reports explicitly state that certain data may be missing.
Attempting to secure a title without the original title in hand involves navigating through a series of challenging procedures. Some noteworthy points include:
It’s essential to recognize that obtaining a title for a vehicle without the original one is intentionally challenging. This safeguards the interests of both the prior and new owners. While it might be tempting to explore alternative routes, keep in mind that these often come with their own set of difficulties and annoyances.
If you haven’t yet made a purchase, our recommendation remains consistent: refrain from buying a vehicle without a title. If you’re already grappling with such a situation, remember that there are avenues to explore, but success is not guaranteed, and the process is intentionally arduous. Always approach such transactions with caution and awareness of the potential hurdles that may arise.
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