How To Buy a Car Amidst Never-Ending Supply Chain Pain

Years of supply chain issues, including a global microchip shortage, have crippled automotive manufacturing. Low dealership inventory has made car buying a real pain. Experts don’t expect the situation to improve before 2024. Luckily, Consumer Reports has some tips on buying a new car in these trying times.

Why is there an automobile shortage?

Dealerships around the country have had low inventory for two years. This is because supply chain interruptions caused by the COVID-19 pandemic and exacerbated by the Russian invasion of Ukraine have resulted in a global shortage of the microchips required by automobiles.

Truck and parking lot showing the limited inventory of a car dealership, Tesla sign visible in the background.
Tesla dealership | David Paul Morris/Bloomberg via Getty Images

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You can’t build a modern car without computer chips. Even the most basic modern car needs at least two dozen processors (also called microchips). Consumer Reports points out that certain cars–with extra luxury or safety features–may need over 100 processors. With the move toward electrification and automation, demand for microchips will only increase.

As demand is increasing, the global microchip supply is down. This is mostly due to the COVID-19 pandemic shutting down several important factories. Conflicts, disasters, and even extreme weather have further strained this supply chain.

As automakers are struggling to secure enough microchips to build vehicles, they have had to reduce output or even modify their designs. The result is that it is difficult for consumers to find the car they want in stock. Factory orders are also backlogged.

Think hard about your car needs

Birds-eye-view of a Ford dealership with a limited new vehicle inventroy because of the semiconductor microchip shortage.
Ford dealership | David Paul Morris/Bloomberg via Getty Images

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Consumer Reports’ first piece of advice for buying a new car is to think long and hard about whether you need one. The publication points out that in 2022, it may be worth your time and money to repair a broken older car that was not worth the trouble a few years ago.

If you truly need new wheels, think next about how badly you want a brand new car. Sam Abuelsamid is an analyst tracking the automotive industry. He spoke to Consumer Reports and pointed out that “Low inventory means reduced or nonexistent discounts and deals on new vehicles.” The result? “It’s likely that car buyers will be paying more for new vehicles, at least through 2022 and perhaps longer.”

Buying a new car might not translate to getting all the new car features. Because of the chip shortage, some automakers “Are just deleting or limiting the availability of features until such time as chips are available.”

Finally, buying a new car may be no more convenient than buying a used car. With the current low inventory, you may have to hunt to find the specific car you want. The process could prove as tiring as shopping on the used market.

How do you buy a new car in 2022?

If you can put in a factory order a year or two before you need a new car, you are much more likely to end up with the vehicle you want. If you hurry into a dealership to buy a car today, you may have to settle for a model or configuration far from your first choice.

A customer learning how to buy a new car during the semiconductor microchip shortage.
Dealership customer | J. Conrad Williams Jr./Newsday RM via Getty Images

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Abuelsamid said, “If you anticipate needing a new car in the next six to 12 months, it’s probably best not to wait…Go ahead and place a factory order now.”

Your factory-ordered car may still have certain features missing. For example, General Motors stopped offering heated seats for several months in an attempt to conserve microchips. But if you plan ahead, you may still get the make and model you’d like.

Next, see my colleague Joe Santos’ tips for buying your next car or watch the Wall Street Journal explain how automakers are adapting to the global microchip shortage:

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