DETROIT (Michigan News Source) – Americans buying new cars today may find themselves waiting far longer than they could have expected after the dealerships have experienced immense delays. 

There is a rising trend in what some call ghost inventory or phantom stock, a phenomenon which involves a dealership listing a car on the website that is not actually available.  Some attribute this mostly to the shortages in microchips needed for cars, and other supply chain snags and parts shortages.  To deal with these issues, some dealerships are resorting to ghost inventory sales. 

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Ghost inventory is defined as vehicles that are shown on dealership or third-party car shopping websites that do not exist yet for a customer to drive home because they are in-transit to a dealership or in line to be built at the factory, industry experts said.  According to the Detroit Free Press often there is no firm timeline for when the customer will get it. In many cases, dealers often tag a stock photo of a car on their websites as “in transit” to be up front, but not all do. 

“This is another one of those things that emerged from the industry troubles we’ve had,” Director of Insights at Edmunds.com Ivan Drury said, “Shoppers were frustrated because people assumed things would be the way they always were and the car that was pictured on the website was available right away.”

30% to 40% of inventory across various car shopping or dealer websites are ghosts according to Drury’s estimates. 

“They’re suspect. Some will and some won’t be labeled as ‘in-transit or not built,’ ” Drury said. “Some may say ‘coming soon’ or ‘in-transit’. But you can pretty much assume just about everything you’re looking at is not available.”

President of Fox Dealer, Bob Melian, which helps create websites and digital advertising for 500 clients, mostly car dealerships nationwide.

Melian said that ghost inventory has always existed on a limited level in the past.  He attributes most of the expansion to the heightened demand for cars following the eight week period that all auto factories in North America closed.  

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Melian said he estimates less than 15% of dealerships nationwide are showing vehicles on their websites and not disclaiming that they are not in stock and “letting you call in and striking a rapport with you and then saying, ‘Oh that just sold.'” 

Motor City Buick GMC in Bakersfield, California decided to be proactive about busting the ghost inventory problem, said Chief Operations Officer of the dealership John Pitre.  

“We disclose that a vehicle is on order from General Motors and subject to change or cancellation,” Pitre said. “But they build 99% of them.”

Pitre called it a “scheme” and “deceptive” when dealerships show cars on their websites but do not disclose that they are unavailable. But he knows why some dealers do it.

Fortunately, there are some measures that car buyers can take to avoid ghost inventory, or at least be aware about the reality of their non-purchased car. 

Drury recommends looking on the website for a filter to search for vehicles in stock, or calling or texting a sales consultant what is in stock for immediate delivery. 

Melian recommended calling or texting the salesperson and asking “When can I pick up this car?”

“That will cut through all the mustard,” Melian said. “Let’s say 20% are nefarious and tricking you, once you get on the phone they know the jig is up. Delivery date is the key.”

He also suggested requesting a video of the car which provides an indirect way of asking if the car is really there. 

“The car business has improved 100% in the years, but there are still a handful of bad ones and they stick out glaringly,” Melian said. “Kind of listen to your gut.”

Michigan has taken steps to respond to the microchip shortage and hopes to become a leader in the industry, and EV industry, despite being passed over for consideration to host new EV battery production plants.