ATLANTA — Pandemic related supply chain delays are have a huge impact on the market for cars.
If you’re buying, you’re likely getting major sticker shock, with prices up nearly 40% this year. However, even if you’re not buying or selling a vehicle, experts say the supply chain chaos could still affect you.
The car market has gotten so crazy that many dealerships are offering to buy people’s vehicles back for even more than what the customer originally paid for it.
“Right now the used car market is ultimately crazy," said Perry Jones, sales manager at Classic Chevrolet. “Normally I'd carry close to 400 new cars. I have five."
A global shortage of microchips led to a shortage of new cars, which led people to scramble for used cars instead, causing prices for both to skyrocket.
“I saw a Cadillac Escalade, brand new sitting in Georgia with 161 miles on it, original MSRP $79,000," said Jones. "It went for 112.”
According to the Used Vehicle Value Index from Manheim, the worlds largest auto auction company, used vehicle prices increased 9.2% in October and whopping 38.1% over the last year.
“It is going up significantly," said Marty Parker, a supply chain expert and lecturer at the University of Georgia.
Parker said it’s not only the chip shortage driving prices up, but also inflation (now at a 13-year high) and increased demand as many are having to commute to work again for the first time in over a year.
"All of these factors together are a perfect storm and are not helping us at all," Parker said.
However, he added that if you have a car you don’t need, this is a great time to cash in and carpool.
But if you need your ride, don’t be tempted by dealers offering to buy it from you, even if they’re offering more than what you paid, because the crazy market likely isn’t going to improve any time soon.
“I'm hearing out a year or two," Parker said. "If we have another significant outbreak in different countries that manufacture these things like Taiwan, it could be even longer.”
The supply chain issue is also impacting rental cars, which could affect your travel plans.
According to AAA, daily car rental rates have increased 4% compared to last Thanksgiving at $98. Online booking company Kayak says rental car searches for the upcoming holidays are up 230% from last year.
AAA recommends reserving rental cars as early as possible.