Most New Vehicle Buyers Aware Of Microchip Shortage And Low Inventories, Study Says25
The global microchip shortage has led to unprecedented low inventory levels for new vehicles, in turn leading to increased demand and higher average transaction prices. It may seem as though oblivious car shoppers are just getting gouged by dealers trying to capitalize on the situation, but according to a new study conducted by Cox Automotive, most consumers are well aware of the chip shortage and the effect it’s having on the vehicle market.
The study found the vast majority of consumers surveyed “are aware of the global microchip shortage and are expecting limited choice and higher transaction prices,” when they get to the dealership. Dealers are also being upfront with these buyers, telling them that due to their low inventory levels, they’ll likely be paying full price to put the vehicle they want in their driveway.
According to the survey data, 76 percent of buyers were aware of the chip shortage, while 83 percent of those buyers were aware of the impact it’s having on the new vehicle market. Furthermore, 73 percent of car shoppers expect to face higher prices, while 59 percent expect less favorable deals/lower incentives. A surprising 42 percent of people would be willing to pay over MSRP to get the vehicle they want, as well. This seems to suggest that dealers aren’t pushing consumers to pay MSRP or above MSRP amid low inventories, as they came to the dealer expecting to pay more than usual.
GM has been forced to temporarily shut down several of its North American assembly plants due to the chip shortage. The automaker has lost out on the production of 80,000 vehicles so far this year, including 17,000 examples of the Chevy Equinox crossover, which is one of its best-selling models. The automaker is prioritizing its full-size trucks and SUVs amid the chip shortage, which are not only some of its best-selling products, but also its most profitable. Despite its best efforts, GM has still hit some chip-related problems with the Chevy Silverado and GMC Sierra, building certain examples without Active Fuel Management (AFM) and Dynamic Fuel Management (DFM) technologies to save on chips.
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Ah pay more get less.
Classic American Financial stupidity.
If you don’t like America, why don’t you leave?
that’s what those terrorist on jan 6th should’ve done.
You mean antifa? They were the ones who instigated it.
steve: Amen brother!
M & M: please leave this site. Your lies and ridiculous comments don’t belong here.
I heard from a dealership employee that they are screwing people on parts and service.
Oh, you mean like replacing a radiator for $1200 on a 2020 Chevy Sonic?!? Tell me about it :/
WHAT??? I didn’t know radiators had micro chips! Holly cow.
I know they don’t. But why that stupid price?
The dealership claimed the radiator is $400. The exact part# is $90-$225 across the web.. it’s ridiculous.
But a 2020 needing a radiator? And not under warranty? From an accident?
I ran over a rear differential on the Highway late at night. I also had performance parts installed shortly after that incident. With the coincidental timing of the two events, I thought it was the performance parts causing the engine to run hot and burn coolant. Turns out, a bad water pump and radiator. :/
Do they know it’s because bill gates is putting them in his vaccine?
are you sure it isn’t frito-lay?
“She” doesn’t even know how a microchip works, lets be honest.
No no, microchips are for the computers that make people believe the world is round, haven’t you heard?😉
You don’t REALLY believe that old liberal round earth trope DO you?
No, I believe in math and science. The same stuff you’re using now to disprove it….
Don’t be silly. If an American company was sticking microchips into people’s arms.
1. The chips would instantly connect with your Phone.
2. You would be able to download your whole music library, and listen to music inside your head. Without using any devices
I went to a local Buick/Caddy/GMC dealer a couple of weeks ago looking at the new Envision. The salesman (a friend of my wife) told me that the only way you can get a car for “sticker” is that you have the full GM employee discount because they are not allowed to charge over MSRP for those transactions. Otherwise, if you have Friends & Family (Supplier), you will be paying some sort of markup. If you don’t have a discount, don’t expect any kind of deal…he told me that if you aren’t willing to pay the marked up price, someone behind you will. Some of their GMC trucks were $10K-$20K over sticker…they hadn’t had a Canyon on their lot in months. Their Cadillac’s had similar markups. The only vehicle they had that wasn’t marked up was the Encore GX. They had dozens of those and, as of that time, the plant in South Korea was still cranking them out. The only upside to having a leaner inventory on the new car side is that used car trade-in prices have also gone up. That might take a little bit of the sting out of the markups, but not all of it. He told me to wait until the fall or winter when the 2022’s start to hit the lot to see some of the deals return.
Dealer I took my car in for warranty work said they were offered from a Broker 1000 dollars over MSRP for five of the Denali’s they have. So people are willing to pay if they need the vehicle.
Where I work, I’m in the fleet department and we deal with Truecar and mostly brokers. The brokers are making a fortune on this stuff (covid related and now chip shortages/inventory issues). The brokers are paying more because they are charging a lot more. Supply and demand.
I’ve been telling Truecar customers that if they can wait, do so. Right now, the absolute best thing to do would be to sell a clean (used) car you have now if you can get by without a car or second car for a while. Reason is the used car market is going through the roof! Even the rental companies are now buying used cars. So sell high, wait till this inventory problem levels off and then pick up a new car for a lower price than now. Win, win. But bottom line is always about supply and demand.
It is remarkable, very amusing idea
I see and hear all this talk about a shortage of micro chips resulting in a lack of cars being delivered to dealerships. You wouldn’t be able to tell that by the number of cars that our local Hyundai and Subaru dealers have. Their lots are overflowing and they are buying land elsewhere to make lots to store the cars. You could have a choice of any color, any model, any options with all the cars that they have in stock. You just don’t know what to believe these days with all this fake news!
Another thing that I noticed today while driving by our local Carmax which up until today I guess was also loaded with cars parking them all different ways, but today I noticed many empty spots so maybe our local car rental places are buying them up or nationwide car rental companies buying from Carmax and shipping the cars to needed locations?
Why is it that there are trucks that were just built last month that are getting the chips and the trucks that have been built for 3 + months not getting any?