Car Shopping Amidst the Microchip ShortageIt wasn’t too long ago when the news of a microchip shortage emerged amidst the ongoing crisis of a global pandemic. While this might not have seen like a large setback considering how Covid-19 had turned the entire world upside down, it affects us in more ways than you might think. Nowhere was this setback felt more than the automotive industry. Today’s vehicles are more complex than ever, and microchips are needed to help manage and run all the intricate on-board computers that are necessary for daily use. Despite the decrease in production, there are still ways in which car shopping can still be done. We’ve formulated a list of some things you should be aware of, and some tips for those of you who are currently in the market for a new vehicle.
What You Should Know
- Supply is Low and Demand is Still High The economy that we live in is based on the principals of supply and demand. While the need for cars will always be at an average level, the supply isn’t as plentiful as normal. When supply is low, the demand increases, and so can prices.
- Endangered Discounts Because of the significant decline of supply and inventory, dealerships will be less likely to lower their prices. If there’s a dealership in town who are famous for constantly lowering prices to move inventory, don’t be surprised if this slows down. Prices for new vehicles have a very good chance of being raised in an environment such as this.
- Used Vehicle Prices are on The Rise While many manufacturers have recently embraced the concept of CPO (certified pre-owned) programs, the lack of new inventory means that prices for used cars will most likely rise to meet the increasing demand for vehicles.
- Do Your Research Because we live in a consumer-based economy, there are several resources that are meant to help you. While any shopper should always keep a copy of Consumer Reports handy to evaluate which make and model is right for them, sources such as KBB (Kelly Blue Book) list the market value for used cars, and sometimes the MSRP of new vehicles. This will give you a better idea of what you should be paying. If a dealer has a price marked up over the MSRP, consider it a red flag.
- Sedans are Almost Always Plentiful Trucks have become popular as luxury items and the SUV continues to ride a tidal wave of popularity as the ideal family vehicle. However, the four-door sedan is almost always in stock and some models are more plentiful than ever. These vehicles are cost effective in terms of fuel economy and are normally cheaper to insure.
- Keep Your Options Open While you might have your heart set on a particular vehicle, it might not be available, or its price might be marked up by a considerable amount. Finding a car that’s both practical and affordable should be a priority. If not, you might want to wait it out until the overall situation improves.