Bay Area dealerships closing as COVID-19 strikes used cars sales

SONOMA, Calif. (KGO) -- The coronavirus pandemic has impacted businesses of all kinds, and car dealerships are no exception.

Adam Kovacs is feeling the effects at his used car dealership in Sonoma.

"We used to have four salesmen working her seven days a week," said Kovacs, who immigrated from Germany with next-to-nothing eighteen years ago.

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There is next-to-nothing in the lot of his dealership, today. He has six cars for sale where there used to be forty.

"They're not replaced. They're the inventory I have."

It's another economic attack from COVID-19. The virus is killing off small used car dealerships across the nation.

"I am actually at this point, done. Consolidating. We'll be moving out."

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The Kovacs will sell any remaining cars at his nearby maintenance shop.

The issue traces to inventory, or in this case, the absence of it. People aren't driving as much. Or selling their cars. Or trading them in. So places Kovacs Motors don't get the inventory.

"The COVID factor has lowered the supply of cars," said Henry Hansel, who owns a dozen new car dealerships in Northern California. COVID-19 has changed his business model.

Hansel now keeps many of the trade-in cars that he used to sell at auctions, just to maintain his own supply.

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"It used to be we would never consider selling a car with more than 100,000 miles. Now, we will consider selling exceptional ones with more than 200,000 miles. The small independents are in the biggest hurt. That car would come from us because we would want to sell it. Now we do want to sell it."

It's another example of COVID-19 making tough times all around, with an additional multiplier for Adam Kovacs. He also owns gyms in Sonoma County. They remain closed and hemorrhaging money. Adam and his wife Jenny keep waiting and hoping for some kind of small business assistance.

"Nobody knows what is happening one day to the next. As business owners, it is hard to plan for that," said Jenny Kovacs. "He tries to shield us, but It is hard to watch him suffer at night."

"Does he sleep?"

"No."

"Do you?"

"No."

Nor would many of us after laying off 100 people, with a third wave of Covid-19 now rising. There is no vaccine for hard times.

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