Car chip shortage: new cars hard to attain, used car value skyrockets
BOWLING GREEN, Ky. – Leachman Buick GMC Cadillac in Bowling Green is just one of the many distributors on the receiving end of the nationwide car ship shortage.
General Sales Manager Tyler Jaggers has worked at the dealership for 15 years. He said the nationwide chip shortage is affecting his company as well as all other manufacturers.
“There’s a chip shortage right now. We’re down quite a bit in the new car inventory wise. When we get those they’re sold pretty immediately,” said Jaggers.
He said with the lack of resources including chips, car parts and workers- all needed to make new cars- people are coming to their lot for older models.
“We’re seeing more used cars being sold,” Jaggers noted.
He said he used to see upwards of 200 new cars in their lot with each car distribution. Now they are at the 20 mark.
“It usually takes 6 to 8 weeks to order a new vehicle. Now it takes anywhere from, it could be 12 weeks. It could be 30 weeks,” Jaggers explained.
But why is this going on? According to Jaggers, it’s because of Covid halting chip making across the seas.
“China produces 90 percent of our chips,” Jaggers said. “China’s running at about 10 percent right now, so with them producing 90 percent of the chips and running at about 10 percent production, that’s the shortage that we’re seeing.”
Over at the Hyundai dealership about a stoplight down the road, Hyundai & Nissan’s used car director Michael Tarrence has been in the business just shy of two decades. He says this supply and demand shift actually benefits the customer.
“The used car market has been a roller coaster all summer,” Tarrence said. “Used car prices are up. People’s trade-in values are up. We’ve been calling people who’ve got one or two year old cars asking them to upgrade or sell us their cars. We’ll give them as much money as they paid for when it was new.”
Like Jaggers, Terrance said they used to stock upwards of 60 new Hyundais and 100 Nissans. Now they only have about 25 new Nissans on the lot and about 5 new Hyundais.
“You saw the lot. We don’t have any new cars. We sell a lot more used cars, cause we just can’t get the new cars,” Terrance said.
He also noted in many cases, a test drive before you buy is not always in the cards.
“We’ll shows [a car] that’s comparable for what they’re looking for. They’ll not always get to test drive it. It’s like a first come first serve basis,” said Terrance.
Terrance helped Monica Long look around for a car. Long said she’s considering trading in the previous used car she bought her for another.
“Used cars seem to be much cheaper,” observed Long. “You can get a used 2020 for about the same price that you can get a brand new one. A lot of what I’ve noticed is the brand new vehicles are selling for about three times the amount they would normally.”
Despite the changes, the dealerships say they’re holding up pretty well.
“We are still maintaining our average sales,” said Jaggers.
“It’s increased our business,” said Terrance. “We’ve sold more used cars than we have probably since I’ve been here. So, it helped my department.”