Car prices for both new and used vehicles are at record highs as a result of supply chain shortages, with prices up more than 12% for new cars and 35% for used cars.
President of Automobile Dealer’s Association of Mega Milwaukee (ADAMM) Jim Tolken said the lack of supply leads to high demand and ultimately results in higher prices. “Inventory from all the manufacturers – because of the inability to produce a number of cars – has been reduced.” Tolken said “I would say on average across the country, and the Midwest might be even a tad worse, for most manufacturers it’s a 20 day or less supply of vehicles.”
Computer chips are among one of the parts highest in demand. These chips are often manufactured in Ukraine and due to the war, production has been slowed down. In turn, many people are looking to buy a used car, but Tolken said consumers will run into the same issue.
“Those that normally would consider buying a new car, and need to buy a different car, are opting to buy a used car. So, the price of a used car in relationship to a new car is still less expensive.” Tolken said “But, the cost has gone up significantly because of the lack of new car inventory.”
In general, dealers have limited ability to move on price because they don’t have to right now. For people looking to buy a car right now, used or new, Tolken provided three tips to better position yourself.
- If you have a good trade, work to get top dollar for it
- Consider buying out your lease and trade in the car
- Look for cars that dealers have in higher supply