Computer chip shortage cuts new vehicle production, sends used vehicle prices soaring

Posted at 3:31 PM, May 19, 2021
and last updated 2021-05-19 18:19:22-04

A shortage of semiconductor chips is forcing automakers to cut production of new vehicles and sending the prices of used vehicles higher.

"The microchip crisis is probably the worst crisis I’ve seen in the auto industry, at least in my career, in terms of supply chain," General Motors President Mark Reuss told Fox Business.

With vehicle inventories declining, it has become a seller’s market.

FAU professor David Menachof discusses computer chip shortage in the auto industry

FAU professor David Menachof discusses computer chip shortage in the auto industry

During a normal year, new car buyers can usually haggle over the price and negotiate it down. But during the computer chip shortage, buyers can expect to pay closer to the sticker price.

For some particularly popular vehicles in short supply, some dealers are charging prices above sticker price.

If you have a vehicle you'd like to sell, this may be the best time to do so.

Joe Cohen owns Prime Motors in Boca Raton.

"We have more than doubled and are working 10 times harder to find a car," he said.

While selling your vehicle to a dealer is easier than selling it yourself, you are more likely to fetch a higher price if you don't mind the hassle involved with selling it yourself.

Marshall Sklar says he sold a used Lexus to Carvana and was pleasantly surprised at the selling price.

"They gave me an offer that was almost to the penny what I paid a year and a half ago," Sklar said.

The computer chip shortage is expected to ease up by the end of this year or early 2022.