Car prices seem to have been steadily rising in recent years (along with everything else), but what is happening to the market now? There have been several factors impacting the cost of cars, including the pandemic and the knock-on effects, a supply chain issue, the global chip shortage and Brexit. In addition to rising prices, motorists are also finding that they are having to wait much longer for their vehicles. In this article, we will investigate some of the reasons why this is and what the outlook is.
The Chip Shortage
The key reason why the automotive industry has been disrupted has been the global chip shortage, which has led to rising prices and long waits for new cars to be produced. The chip shortage came from the pandemic with chipmakers slowing production at the start of the pandemic and then struggling to keep up with demand when there was a resurgence in summer 2020. While the production of the chips is improving, it is thought that this disruption will continue into 2023 and potentially longer.
Wait Times
Manufacturers are stating that they are doing everything that they can to speed up production so that people are not having to wait for their vehicles, but many are struggling with motorists facing long delays. Normally, ordering a new car would take around 6 weeks for it to arrive at the dealership. In 2022, you are likely to face around a 6-month wait or possibly even up to a year. This is not an ideal situation for motorists, which is one reason why many are turning to lease deals so that they can quickly get their hands on a new car without delay (along with the other benefits of leasing).
The Outlook
So, what is the outlook for the automotive industry? With disruption likely to continue for another year along with the rising cost of living, consumer confidence is low and many are avoiding any kind of big-ticket purchase. This means that it is likely that the cost of new and used cars will stabilize and potentially bring costs down. It is hard to predict what will happen during periods of uncertainty and with there being so many different factors, but experts are predicting that there will be some stability in the near future particularly once the global chip shortage is resolved.
It is a turbulent time in the auto industry right now due to various factors. This is impacting the cost of both new and used cars and seeing motorists have to wait a long time for their new vehicles to arrive. When you factor in the current cost of living crisis, it is likely to be a bumpy road ahead but there are reasons to be optimistic with a long-term view.
