Shopping for a new car is hard — and may stay that way

Savannah Maher Dec 14, 2021
Heard on:
HTML EMBED:
COPY
An aerial view of a Ford dealership in Richmond, California, shows a nearly empty sales lot. Justin Sullivan via Getty Images

Shopping for a new car is hard — and may stay that way

Savannah Maher Dec 14, 2021
Heard on:
An aerial view of a Ford dealership in Richmond, California, shows a nearly empty sales lot. Justin Sullivan via Getty Images
HTML EMBED:
COPY

Lately, shopping for a new car has not been for the faint of heart.

The global computer chip shortage and other supply chain issues have left dealership lots empty, sending auto prices sky high.

So how are the folks in the market for a new car faring?

A few months before Troy Bratton and his wife were expecting their new baby, they put down a deposit on a new Kia Telluride. The baby arrived, but there’s still no sign of the SUV.

“That was supposed to come within 90 days. But it’s been almost four months now,” Bratton said.

So, on to plan B: He’s shopping around again in the Denver area.

“When we go to car lots, they look like they’re not even in business. They’re just empty,” he said.

Eric Nelsen’s been having the same experience trying to buy a car for his teenage son in Houston.

“So you go into the showroom, and it’s like, ‘We’d like to test drive something.’ And they’re sort of, ‘We don’t have anything,'” he said.

With few options in the new car market, Nelsen ended up buying used and spending more than he wanted.

“Let’s just find something and hope that when my youngest turns 16, it’s back to the old days,” Nelsen said.

He probably shouldn’t count on that though, said analyst Michelle Krebs with Cox Automotive. “We don’t ever anticipate it’s going to be normal like it was before with an abundance of inventory,” she said.

Dealerships would lose money on their old business model of packing their lots and showrooms with vehicles, Krebs said.

“What the automakers and dealers have found is that their profits are better when they keep supply more in line with demand,” she said.

Not that they’re in line right now. Krebs said that the chip shortage will last well into next year, and in the meantime, buyers can’t afford to be picky.

On the flip side, she said that if you have a car to give up, dealerships will pay top dollar.

In fact, that’s what Bret Williams found when he traded in his sports car for a Toyota Tacoma in Austin. “I got an offer that was over the Kelly Blue Book,” he said.

But Williams had to make some compromises on his new ride: four doors instead of two and a darker gray than he was hoping for.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.