The car market is all about give and take. What may be good for sellers is not always good for buyers, and vice versa. Right now, a global chip shortage has sent used car prices sky-high as supply chains dry up. Those looking to purchase a new vehicle have turned to the used market in light of the delays in supply, pushing prices higher. Thankfully, Consumer Reports has a few tips and tricks to get around this boom in the used car market.
What’s causing the chip shortage?
Semiconductors are terribly important. They control anything and everything in modern electronics, especially cars. Everything from your digital dash to your brake lights is controlled by semiconductors, and the industry is fresh out for the time being. Per Consumer Reports, what happened is more complex than simply making more semiconductor chips.
The global pandemic is arguably one of the leading causes of the semiconductor shortage. People are spending more and more time away from home as strife caused by the pandemic continues to ease, increasing demand for new products. This new demand, combined with manufacturers ordering any and all chips they can has led to the current situation in the auto market, according to Consumer Reports.
Consumer Reports: what you can do?
There is a silver lining to all this if you’re looking for a new or used car right now. Because the demand for cars is so high right now, it’ll be no trouble at all to get good money for your used car according to Consumer Reports. As a result, this translates to being able to roll those profits into a newer vehicle. High sale price also helps negate the effects of high car prices.
Additionally, the COVID-19 pandemic finally has some solace to offer. With consumers working from home, some aren’t looking to immediately replace that car they just sold with a new one. If that isn’t enough good news, look to sedans. If you’re able to get by without a massive SUV, the popularity of said SUVs has caused sedan prices to stay low, even with the semiconductor shortage blowing up the market.
When will the shortage end?
Unfortunately, it’s difficult to say when the shortage will end. Semiconductor production is a multi-step process relying on many other industries to produce a final product, causing a ripple effect. Once the supply chain catches up, car prices will begin to stabilize again. As for when this happens, it’s hard to say.
For example, some estimates point to an end as early as fall, some as long as the year 2023. Either way, if you want a car right now, the best advice Consumer Reports has for you is patience. If possible, sell your car now and wait for the market to calm, or use the high sale price to offset the cost of that new ride. Either way, there’s a lot of waiting to be done.