INDIANAPOLIS — Central Indiana car dealerships are facing an industry-wide disruption that is causing inventory to plummet and prices to rise.
Across Indiana, new cars are not rolling in as usual, due to a computer chip shortage that’s hitting the industry hard.
“If you look on our lots, you’ll see a lot of bare spots,” said Tom Wood Group Director of Fixed Operations Bill Demaree. “We started experiencing the shortage within the last two months.”
Demaree noted that car buyers shouldn’t panic, but they should expect to see the effects of the disruption, which could last into 2022. Those include limited inventory and longer waits if you are looking for specific models.
According to Cargurus.com, used car prices have also steadily risen since March, as more buyers turn to used cars and rental companies look to increase inventory as pandemic restrictions ease up.
“It’s a great time to sell us your used car. Used car values have really increased and it’s a supply and demand,” Demaree said.
Indiana University Kelley School of Business economist Kyle Anderson called the disruption very unusual, due to pandemic and non-pandemic issues that shut down multiple factories that produce the computer chips.
“It might be a year before things kind of normalize out,” Anderson said. “Making chips is a very complicated process so there’s really only a small number of companies that can do it in the world.”
If you’re in the market for a used car, you should expect to pay more in the coming months or potentially wait it out. Demaree said the service department at Tom Wood Lexus had seen its calls double in recent weeks as more customers brought in their vehicles for service.
“Continue servicing the vehicle that you have, some of the leasing companies are extending the lease of your vehicle to give you a little bit more time because you maybe didn’t drive it for that last year,” Demaree said.
Most importantly, prepare to be patient as dealers work to restock as quickly as possible and get drivers back out on the roads.
“Don’t panic. You see empty lots but we do still have plenty of inventory for you, new and used,” Demaree said.
Before you buy a car, used or new, be sure to take a look at Indiana’s Auto Buyers Bill of Rights, provided by the Indiana Attorney General’s Office at the link here.