Why Are Cars So Expensive Now?

If you’ve wondered why prices on both new and used cars seem to have leapt up over the past two years, you’re not alone. The pandemic wreaked havoc on global supply chains, and many of the components used to build new cars disappeared from car maker’s inventories. New cars were affected directly by this, but that caused a domino effect where even used cars began to have a shortage of supply. All of this remains true, due to a shortage of the computer chips used to make modern vehicles function.

Chip Shortage Details

The chip shortage itself affects a massive number of products globally, beyond cars and trucks in Naperville. These days virtually every consumer item uses semiconductor chips, from phones to laptops to electric toothbrushes to appliances and toys. During the pandemic the factories that produced these chips were forced to shut down, and spinning production of these highly sensitive and complex microscopic parts back up takes time. The backlog this created is a huge part of why are cars so expensive globally right now, including new trucks here in the Montgomery area.

Car Chip Shortage Problems

Why exactly are Yorkville MSRPs up right now? There are a few specifics that have exacerbated the car chip shortage:

• Car companies can only order chips months in advance because of how said chips are produced and the high demand for them. 
• During the COVID-19 lockdown, car companies globally braced for the worst, but when the lockdowns greatly slowed Covid, demand for cars reappeared far faster than anticipated. Companies were not prepared for this, and quickly began running out of chips.
• Shipping ports have also been affected by the COVID-19 pandemic, with enormous backlogs. This means the chips that are available often get stuck in limbo.

Possible Chip Shortage End

Right now, experts and industry insiders can’t be certain when the chip shortage will end. There are a range of predictions from six months to three years, but only time will tell when the automotive industry will get back to normal.

Contact River View Ford to Learn More

Even though the chip shortage has made finding a car challenging, it is not by any means impossible. River View Ford remains an excellent place to get the vehicle you need, and our finance center can still get you that vehicle for a fair price. Visit us today to learn more!