ESTERO, Fla .– After Denise Michael’s old vehicle broke down about 10 months ago, she bought a used car.
She wasn’t thrilled to be doing it at the time. Now she is relieved it happened when it happened.
“As bad as I thought at the time, I ended up taking the lead,” said Michael. “Since then, I have seen where [the car I bought] roughly doubled in price.
Janet Zuk, who rents her car, had it fixed the other day and couldn’t believe what she saw at the dealership.
“There was like no car on the ground,” she said. “Usually [the dealership is] packed with balloons and everything. It’s truly sad.”
At Estero Bay Chevrolet, their front parking lot is normally full of hundreds of new vehicles. However, on a given day, there are only a few in the field.
“This is unprecedented,” said Pat Denson, co-owner of the dealership. “I wouldn’t want to go through this without 32 years of experience.”
Denson said COVID-19 has had a huge impact on the auto industry. Initially, there was a drop in demand and production when the pandemic first hit. Now there is a distribution nightmare going on.
A global shortage of electronic chips is the main problem limiting the production of new vehicles. A consulting firm recently estimated that the shortage will cost the auto industry $ 210 billion in revenue this year.
“He was the initial disruptor. That’s what baffled everyone, ”Denson explained.
Increased demand for electronics and home appliances amid pandemic shutdowns has contributed to the microchip shortage. Denson said things only snowballed from there for the auto industry.
“I had a meeting with General Motors the other day and some vehicles are missing two, three, four different things,” he explained. “You have seat issues, foam issues, microchip issues, so it all falls apart after that.”
Estero Bay Chevrolet is always new cars – almost a few hundred a month, Denson said – but most are sold before they even get to the dealership. The industry is following the world’s path: there is less in-person shopping and more online pre-orders.
“It’s not like it used to be,” Denson explained. “You had 10 and you chose the one you wanted. Now, how we do it is you buy it before it gets here. We kind of tell you what we have to come.
It is difficult to know exactly when the industry will rebound. The shortage of new cars has driven up prices specifically for used vehicles, Denson explained. In some cases, used cars cost several thousand dollars more than before the pandemic.
So how can you make the market work so that you get the best deal? Denson suggests trading in your used car – the trade-in value could be very high – and buying something new.
Experts also suggest looking at models that are not in high demand. You might find a good deal this way.
“When people say, ‘When is (the industry) going to get back to normal? “I’m saying it depends on your normality,” Denson explained. “Is it going to come back like two years ago?” Probably not. We probably won’t see this.