HUNTSVILLE, Ala. — It seems like every week there’s a new shortage. If you’ve driven past a local car dealership lately, you’ve noticed the nearly empty lots, that’s because there is a global microchip shortage that could affect the way you buy and sell your car.
We wanted to know why.
Dr. Laird Burns, Associate Professor of Business, UAH, explains, “The microchips are a fascinating add on to automobiles. Now we have fuel management, we have GPS of course, we’ve got a lot more work in autonomous vehicles.”
A microchip, or chip, is a highly developed piece of technology. It’s used in smartphones, cars, and TV's. In the last decade alone, microchips have elevated the tech world by making small and large items highly sophisticated. The shortage of chips was triggered by the pandemic.
But more than just the vehicles are affected.
“Right now is a fantastic time to buy or sell a used car. Right now, demand is very high for used cars and inventory is somewhat limited. So, what that’s doing is creating a significant surge in used car values,” Century Automotive Group Pre-owned Sales Director, Parker Jones, said.
Since the demand for microchips is high and we have a limited supply, we’ve seen shortages in new cars all around the country. The manufactures don’t have the materials they need to continue to produce.
Burns says, “We think it should be simple to fix. It’s going to take probably two years, and billions of dollars of investments to continue upgrading these very expensive, multi-million-dollar lines and some new manufacturing plants. It all takes time and a lot of money."
Dealers are not receiving enough new cars from manufacturers, which puts pressure on them to sell more used cars. Manufactures have opted to send cars without some of the advanced technology, so dealers have items to sell. Then when chips become available the car dealership will install them.
Dr. Burns says because dealerships aren't able to get the supply they need, the vehicles we're driving are just getting older.
The Director of Sales at Century Automotive Group insists that the time to buy a car is now.
“It’s just, if you see a car you like, you better make a decision on it quick,” Century Automotive Director of Sales Ron Volinski said.