Is Car Buying the New Toilet Paper Crisis?
OK, let’s be real. For most of us, it’s never been that easy to buy a car. The car buying process is painstaking, and the investment can be daunting. But lately, it’s getting harder to find new or used cars on lots, because there are some supply chain issues that are affecting things down the line.
Car buying can be fun and exciting. In fact, it should be. However, with all these wild headlines about car shortages, are cars the new toilet paper crisis?
“The reopening economy is demanding so much, it’s causing supply chain issues for just about everything in our lives.”NBC News
Buying a new or used car
Dealers are reaching out to people for their used cars. Buyers looking for anything pretty specific might end up forced to settle on something that’s not quite exactly what they want. Furthermore, all the intensity that the media is placing on the growing shortage could mean car shoppers will begin “panic buying.”
Most remember the toilet paper crisis that struck supermarket shelves across the nation last spring. There were lines to buy toilet paper. For nearly a year afterward, toilet paper became such a commodity that some places put a limit on toilet paper buying to one per person.
If people take to car buying in a frenzy because they are worried about the looming shortage, could that mean an industry crisis? Will we run out of cars and even trade-ins? Or will dealers instate new limits on the quantity of new cars, trucks, or SUVs people can buy in one go?
A car buying crisis
Things are opening back up. The economy is picking up a little steam now as mandates are lifted and vaccines are injected. People are shopping more, and that means the auto industry is also experiencing an influx in shoppers looking to purchase a car.
According to NBC, “Demand is driving up prices for airfare, housing, rideshare and cars.”
At this point, it’s hard to say exactly how dramatic things will get. NBC News shares data that shows “consumers could see 1.2 million fewer new cars built this year.”
That’s quite a dip in inventory. Rising demand could cause a car buying crisis. However, it’s important to remember that this isn’t the only year to buy a car. While there are many enticing models out there, it might be wise for those who can to just wait until later down the line.
After some time when the dust is allowed to settle, consumers may find themselves in a much more inviting automotive market. In addition, plants and factories should have actually had the time to gear back up into full production.
The global shortage of computer chips has greatly affected the production of new cars, trucks, and SUVs. NBC tells readers that “Work from home demand for laptops and monitors led semiconductor makers to shift from making chips for vehicles to personal electronics.”
If car shoppers start reading the news, which they likely already do, things could end up in crisis. Only this time, it won’t be a toilet paper crisis. Rather, consumer could run into problems when buying a new or used car.
Because of the lack of inventory for new cars and closed economy, there are fewer trade-ins in months of late. That means that not only are there inventory struggles with new cars, but used models as well.
Dealerships across the nation are having trouble with inventory. Buying a new car isn’t as simple as merely choosing what you want anymore. Car, truck, and SUV buyers may find that what they want simply isn’t available.
Due to this issue, there are fewer trade ins. With inventory so tight that “cars are being sold even bore they get off the delivery truck.” Fewer new car sales means not as many trade ins. Thus, both new and used cars are affected by the supply chain problems.
Car buying is a nationwide issue
This is an issue that’s not localized. In fact, CARFAX sees a pattern across the country. Analysts are saying that inventory issues could lead to high markups and spikes for vehicle pricing. The time that factories were shut down and not producing vehicles last year has taken a lasting toll on the amount of new cars on dealership lots.
“The last few months we’re seeing life return to normal, if you will. People are anxious to get back to whatever that normal is for them,” said Emilie Voss with CARFAX.
What can consumers do to ease the strain?
Few things can go back to normal as simple as removing a mask. Two months or more of zero production is a difficult rebound. One that, quite frankly, doesn’t appear to be successful so far.
So instead of rushing out and panic buying a new or used car, it might be best to just wait till things mellow out. Car buying could become the next toilet paper crisis. But that doesn’t necessarily mean that it has to. At least, however, if buyers do need a new car, truck, or SUV right now they are likely to get a good value for their trade-in due to the demand.