GREAT FALLS — A worldwide chip shortage has increased the price of purchasing a new car, but how is that affecting the used car industry?
During the Coronavirus pandemic, a demand for electronic goods increased substantially.
This demand caused a global chip shortage, that’s effected everything from getting your hands on the latest phone models and gaming systems, to new home appliances and vehicles.
A new vehicle can have up to 100 of these semiconductor chips on board, that are needed in components from touchscreens to transmissions.
But with these supply issues, used cars are getting higher trade-in prices.
“We’re having to pay more for trade-ins and to go buy a car outright at an auction or from another dealer,” said Tom Bleskin, Owner of Bleskin Motor Company. “We’re paying premium dollar to get them, but it’s the only way to get it, it’s either that or you just don’t have a car.”
According to Carfax, used car prices are about 20% higher than they were this time last year and used trucks are about 30% higher.
But while higher trade-in values are nice, if you want to use that money to buy a new vehicle, you could still end up paying more than you anticipated.
And with new vehicle models unavailable or on back-order, local used car dealerships are seeing more interest in their car lots.
“I’m out looking for cars all the time and I look for quite a variety of stuff, I do a lot with vintage things, as well as modern things, and all kinds of stuff and boats and what not too, but we’ve been doing really well, actually for the whole last 13, 14, 15 months,” said Owner of K’s Auto Sales, Greg Nickol.
Carfax says it’s important to see your car’s value on their website, or on Kelly Blue Book before you sell.
The future still remains uncertain as to when the production of these semiconductor chips will return to normal.
