Think Twice Before Buying a New Car Right Now
When searching for a new car, people tend to focus on the overall cost of the vehicles they want. This includes considering how much they’ll have to pay for car insurance. If you’re in the market for a new car, you may find that prices are higher than usual because of a supply issue.
Learn more about the supply problems car manufacturers are running into and why you should put off buying a new car until it gets resolved.
You’ll see price markups if you’re trying to buy a new car right now | Twenty20
Chip shortages are causing a low supply of vehicles
When COVID-19 just began to take hold, many vehicle manufacturers and dealerships were having difficulty finding any customers. Mass layoffs and travel bans were making it hard to find anyone who wanted to buy a new car. As a result, tons of dealerships offered incredible financing offers, price cuts, and other bonuses to encourage people to buy.
These days, auto manufacturers are seeing the opposite. According to CNET, the world is facing a shortage of semiconductor chips that are used in everything from cars and trucks to Playstation 5s and computers.
Car manufacturers need chips to make important electronic components for their vehicles. Because of the shortage, they’ve had to slow or cut production on some of their products. Ford is one of the manufacturers cutting production for one of their top sellers: the Ford F-150.
When there is more demand than supply, prices increase. Now that COVID-19 restrictions have started to lift, more people are looking to purchase new vehicles. A limited supply means that they’ll have to pay more for the vehicle they want.
Auto manufacturers have waitlists for new cars
If you’ve purchased a new car before, you might be used to walking into a dealership, picking the car, and driving it out that day. CNET reports that one Toyota dealership that usually has a few hundred vehicles on the lot is down to 62 at the end of April.
CNET also reported that one Buick-GMC dealer has nearly sold out of vehicles in their inventory. Some people have started reserving vehicles that haven’t even been built yet.
If you’re certain you want to buy a new car this year, it might be a good idea to plan ahead and get yourself on one of those waiting lists. The semiconductor shortage will last for a while, so it may be better to reserve your spot in line.
Some experts predict that this shortage will last well into 2021. The federal government has even issued a statement about how they might take action to resolve supply chain issues in the near future.
Why should you wait to buy a new car?
If you can wait a bit before buying a new car, you’ll probably be able to save money when the supply returns to normal. You’ll see better deals when demand doesn’t heavily outweigh supply like it does now. In the meantime, you could always lease a newer car, purchase a used vehicle, or buy a car from a private seller.
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