Buying a car can be both exciting and stressful. If you know the make and model you want, going to the dealer isn’t too much of a hassle, but if you’re planning test drives for different options, it can be overwhelming to say the least. There is also a choice between new or used vehicles, financing or leasing, and other small but important decisions about features and upgrades.
Fortunately, most sales associates at the dealership are well equipped to answer your questions and help you make the right choice. But your dealer options may become more limited, as a popular dealer just announced that it will close half of its locations by July 8. Read on to find out which locations in the US are closing
READ THIS NEXT: This popular discount chain is closing stores from June 27.
Like so many other sectors of the economy, the auto industry has been shaken up by the COVID-19 pandemic. According to Kelley Blue Book, the market is currently: characterized by high prices, low inventory and low incentives, compounded by those pesky supply chain issues we keep hearing about. In particular, an ongoing shortage of microchips has prevented manufacturers from producing enough new cars to meet demand, and new COVID-19 lockdowns in Asia and the war in Ukraine have slowed other auto parts.
In light of this, many car buyers have chosen to buy used vehicles. But thanks to good old supply and demand, used vehicle prices have now skyrocketed. And a nationwide auto dealership has been directly affected by this shift and has now chosen to close half of its locations.
If you’re looking for a used car, you may want to look elsewhere than CarLotz. According to a press release from the used car and consignment dealer, 11 locations will be closed in the US, which is nearly half of CarLotz’s total number of locations.
The dealer stores, also known as “hubs,” began closing on June 21, and closing operations will be completed by July 8, CarLotz confirms in the press release. Closures will also lead to a 25 to 30 percent reduction in the company’s workforce.
“While decisions that affect our teammates are not taken lightly and are not easy, we believe closing the hubs is a necessary step to help improve the company’s financial performance,” Lev Peker, CEO of CarLotz, in a statement. “We greatly appreciate all our teammates who have done for CarLotz and are committed to helping them through this transition.”
RELATED: Sign up for our daily newsletter for more up-to-date information.
Having to close locations is never a good sign, but CarLotz also chose not to open any new locations it had on the roll, rejecting plans for three dealers with newly executed leases.
Existing hubs to be closed include those in Lilburn, Georgia; Bakersfield, California; Clearwater, Florida; Highland Park, Illinois; Merritt Island, Florida; Mobile, Alabama; Madison, Tennessee; Plano, Texas; San Antonio, Texas; Lynwood, Washington; and O’Fallon, Illinois.
CarLotz’s four Virginia locations where the company is headquartered are will not be affectedas reported by the Business Magazines†
The main reason for the massive shutdowns is due to the nature of the auto resale market, the company claimed. With so much demand for used cars, CarLotz emphasized the challenges associated with acquiring inventory.
“Over the past 12 months, our sourcing has been put to the test. Increasing our mix of consumer-produced vehicles is a priority to complement our retail remarketing sourcing channel and reduce our reliance on auctions,” Peker said in a statement. a statement. “We believe the closures should allow us to improve sourcing across a smaller hub base and focus on the productivity and efficiency of the remaining hubs.”
CarLotz went public in 2021, as reported by the Business magazines. At the time, the company’s market cap was about $1.2 billion, but the situation has changed dramatically since then. In 2021, the company reported nearly $40 million in losses, and losses totaled $24 million in the first quarter of 2022 alone.
The company expects the location closures will allow for a clearer focus on “future profitable growth,” according to the press release, and CarLotz estimates the closures will reduce operating losses by $12 to $13 million. “We also believe this is the first step toward building a stronger CarLotz, improving cash retention and creating a path to profitability,” Peker added.
READ THIS NEXT: This iconic chain is closing stores from tomorrow.