Why Is There A Car Inventory Shortage?

By

Managing Editor

As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

Follow On: Twitter

, Managing Editor - January 12, 2022

An inventory shortage of new & used cars can be attributed to the coronavirus pandemic and resulting supply chain disruptions. When COVID-19 brought the economy to a halt in 2020, automakers canceled orders for semiconductor chips. Despite a recovering economy, factories continue to struggle with getting new car production back on track in 2022.

A shortage of new cars has resulted in higher prices, with more consumers paying MSRP or more. Pre-owned vehicle prices increased up to 40% due to a resulting surge in demand. Although this created an opportunity for car owners looking to get more money for their trade-in, buying a used vehicle has become significantly more expensive.

The inventory shortage caused manufacturers to take unprecedented steps. Some brands implemented strict limitations on trading-in a leased vehicle. Automakers like GM began prohibiting 3rd-party buyouts in 2021 to get more cars back to their own dealers. As a result, it could be difficult to get top-dollar if you're planning a lease buyout.

There's no telling when used car prices will drop. For now, supply hasn't been able to keep pace with demand. As a result, dealer markups may not go away in 2022. Fortunately, there can be ways to avoid a dealer markup. In addition, factory-certified pre-owned car deals can still offer ways to get a good interest rate on certain models.

Although incentives have gotten worse as a whole due to market conditions, there are still good deals if you know where to look. Ford is continuing to offer 0% financing for 60 months on new F-150 pickups. Meanwhile, luxury automaker Lexus is offering interest rates as low as 0% on select CPO vehicles at the start of the year.

To get the best deal amid the chip shortage, be sure to explore your options. In some cases, the car you want may be better to buy than lease. Alternatively, 0% financing deals still offer no interest for up to 7 years. Some brands are even paying shoppers to wait with order discounts and rate-lock programs for cars that are not yet in stock.

This Month's Top 0% Financing Deals

, Managing Editor

As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

Follow On: Twitter

Privacy Policy|Do Not Sell My Personal Information|Terms of Use|Cookie Policy|Disclaimer|
COPYRIGHT 1999-2022 MH Sub I, LLC dba CarsDirect.com