Where to find your next used vehicle during COVID disruptions?
Supply chain bottlenecks, semiconductor shortages, no rental cars available, a tight labor market – buying a used car can be frustrating right now. With fewer cars on lots and even fewer coming out of factories, working with a trusted dealer is the easiest way to the car you want without facing endless phone calls and unpredictable pricing.
Why are there so few cars on the market?
The effects of COVID-19 have been far-reaching and long-lasting. At the outset of the pandemic, businesses changed their production lines to protect employees and accommodate for social distancing. These shutdowns and pivots made a noticeable dent in production output. Vehicle production fell globally by 16% in 2020 as a result. With fewer cars hitting the market, vehicle owners became concerned about supply availability and have opted not to trade in their cars for newer vehicles. And as the supply of new cars has dropped, the demand for used cars has gone up.
Why aren’t there more cars being produced?
As automakers pivoted and brought more safety to their assembly lines, other issues began to emerge. The demand for semiconductors spiked while supply dropped. As people around the world locked down, their demand for electronics grew. Couple that with increased consumer spending from stimulus payments and pent-up demand from a year in lockdown, and we are seeing a historic demand for new consumer electronics. Personal electronics and cars both rely on silicon chips. Unfortunately, chip factories and the mines they rely on for raw materials suffered the same COVID-related shutdowns automakers have. The chip shortage has resulted in a shrinking supply of vehicles and nearly unprecedented demand.
How long is this expected to last?
Global supply chain issues notwithstanding, semiconductor production is expected to return to full capacity by Spring of 2022 and new plants are being planned in the same timeframe. This should alleviate concerns about semiconductor availability. However, labor uncertainties and continued global demand make predicting the exact timeframe for turnaround difficult.
Have all car manufacturers been hit the same?
No, not all car manufacturers are struggling to the same extent. This difference can be traced back to where car companies source their chips and how they stockpiled chips before the pandemic. For example, General Motors saw sales dip more than 30% this year. Toyota, however, saw a slight increase in sales.
This affects the used car market, too. As fewer new cars hit the road, the value of existing cars goes up. What does this mean for you as someone looking for a used car? It means that brands that can produce new cars faster will see lower prices on their older models. If you have a certain make and model of used car in mind, talk with a dealer like Mile High Car Company to see whether your choice in vehicle has been severely impacted by the current car market blues. A representative might be able to suggest a different make of car that meets your needs at a better price.
Why working with a used car dealer is the best way to find your next vehicle.
A respected used car dealer can help you navigate a complex car market and help you find your next vehicle. The cars on many lots are skewing older, are priced higher than normal, and have little to no warranty protection. The vehicle shortages have also brought a whole host of supply into the market, much of which has an unknown vehicle history and come without exhaustive inspection. Working with a dealer on your next purchase gives you peace of mind in knowing that their inventory has passed an inspection and often comes with the added benefit of a limited warranty, roadside assistance, and a professional maintenance staff available to you at a moment’s notice.
Mile High Car Company of Colorado Springs will help you take the uncertainty out of the vehicle buying process. Our team has built our brand on hard work, solid business principles, and delivering customer value. Focusing on a straightforward, transparent car buying process, Dean Gunter and the staff at Mile High Car Company will help you navigate supply chain issues and chip shortages that have kept you from getting the vehicle you want at the price and service level you expect.
To browse our inventory, check out www.milehighcarco.com. Or come by and take a vehicle for a spin by visiting our car lot at 1480 Ainsworth St. in Colorado Springs.