Many drivers around the world are having a tough time finding a new car right now—and the new car inventory shortage is impacting buyers in Westport, too! The pandemic, as well as some other key factors, have contributed to a global shortage of microchips, which are used to build everything from phones to gaming consoles to–you guessed it–cars.
The microchip crisis has led to a shortage of new cars and a sharp increase in prices for both new and pre-owned vehicles—but don’t panic. Our Fairfield, CT dealership is here to help you make sense of the current market.
Basics of the Automotive Chip Shortage
As we discussed above, the car inventory shortage has been largely caused by the larger automotive chip shortage, which started in 2020 due to the pandemic. It isn’t limited to automotive chips–you might also have trouble finding anything from a new phone to a new vacuum cleaner. Electronic devices all require microchips to run, which means that the shortage has extended far and wide to include almost every type of item.
There are three main contributing factors to the automotive chip shortage:
- Supply: When the pandemic hit in early 2020, factories cut down on their production (or eliminated them altogether) due to the global lockdown, which meant fewer microchips were being made. Even now, as vaccinations are on the rise, many factories are a ways off from returning to normal production levels. The financial problems caused by the pandemic also meant that fewer people were looking for new cars, which gave the factories little incentive to ramp up production again.
- Demand: Although fewer people were buying cars in the early days of the pandemic, demand for new vehicles (as well as TVs, gaming consoles, phones, and other electronics) has now far outmatched the current supply of microchips. More people than ever are looking for new electronic devices, and manufacturers are not yet able to keep up.
- Materials: Together, Russia and Ukraine control most of the world’s neon and palladium, which are the two most important components in semiconductor chips. As a result of Russia’s invasion of Ukraine, neither country is in a position to be producing normal quantities of these materials.
When Will the New Car Inventory Shortage End?
Unfortunately, the short answer is that we don’t know. Experts disagree on whether the new car inventory shortage will improve by 2023, 2024, or even later. All we know right now is that the situation is unlikely to change before the end of the year at least. As new cars become more scarce, the price of both new and used vehicles is steadily increasing—and the continuing new car inventory shortage means that the trend isn’t expected to change any time soon.
If you’re looking for a new ride in the Norwalk area, buying sooner rather than later may help you secure a better price. You might also consider placing an order with the factory instead of trying to find the perfect model in stock.
The Good News About the Car Inventory Shortage
It’s true that the situation regarding the automotive chip shortage is pretty bleak right now, but there are some important pieces of good news to be aware of!
Automakers are also trying out some “hacks” to get around the shortage, such as using less advanced microchips that don’t take as long to produce or coming out with vehicles that have slightly limited features, as opposed to no vehicles at all.
Second, as the price of new and pre-owned vehicles increases, so does the value of trade-ins! If you’re looking to offset the cost of a new or pre-owned vehicle, you can estimate the value of your current model right from our website. You might be surprised to find out how much it’s worth today!
Keep Up With the Latest Auto News at Mercedes-Benz of Fairfield
Times are tough right now, but we at Mercedes-Benz of Fairfield are here to help you with whatever you need. Feel free to contact our office if you have any questions about the new car inventory shortage and what it means for you. You can also explore our other financing and insurance guides online, or stop by our dealership near Weston if you’d prefer to speak with a member of our team in person.
