Chip shortages, supply chain issues causing car shortage

Published: Jul. 6, 2022 at 4:51 PM EDT|Updated: Jul. 6, 2022 at 6:26 PM EDT
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SAVANNAH, Ga. (WTOC) - Car shopping these days is not the simple task it used to be.

Chip shortages and supply chain issues have caused a shortage of cars, and in turn, driven up prices.

Recently, Kelly Blue Book reported that chip production is ramping up but that might help the current car-buying situation anytime soon.

Years ago, you used to be able to walk into a car dealership, pick the car you liked and negotiate a price. Now, you often have to wait for a car to be shipped in before you get it, and forget about negotiating.

According to a study by iSeeCars, the average new car sells for 9.9% above the manufacturer’s suggested retail price, or MSRP.

Though the chip shortage is slowly getting better, don’t expect buying a car to go back to what it used to be anytime soon and if anything, the changes at many dealerships are likely permanent.

“We just do a whole lot more online traffic now. People are buying cars online a whole lot more than what they used to in the past, so with them buying cars online, the car business with the model that we know and have known for years is just changing. But it’s just that sign of the times,” said Harry Chaney, the Chatham Parkway Toyota General Manager.

Chaney says that if you’re in the market for a new car right now, just be aware that you could be waiting for weeks or even months before you get behind the wheel.

Those same issues that are making it so difficult to get a new car are even trickling down into the used car market.

“Prices have skyrocketed for used cars at auctions. Really everywhere, not to mention we went from having maybe 40 cars on the lot, to I think we have like 10 right now. It’s been very hard to get vehicles,” said Omar Afenah, the owner of World Class Auto Sales.

It’s such a problem, that Afenah has also taken his frustrations to TikTok where he has over almost a quarter of a million followers and over five million likes.

“Because there’s no new cars, nobody’s trading in their used car. Because no one’s trading in their used cars, used car dealerships are empty.”

He says it’s important for people to understand why prices are high and waits are long.

“They’re expecting to pay a few years ago prices, and they don’t understand why a six-thousand dollar car is now ten grand.”

According to Kelley Blue Book, the chip shortage that’s caused the car shortage is starting to buffer out. But Afenah doesn’t believe things will ever go totally back to normal.

“Prices will stay high now that dealers know that they can mark up cars and not negotiate and people won’t have a choice. I don’t think it’s permanent, but I don’t think it’ll go back to the way it was.”

Afenah says that his lot is selling cars faster than he can even get them, so if you’re in the market for a used car, your best bet to actually get your hands on one is to act quickly when there’s availability.

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