High demand and a manufacturing shortage of semiconductors — microchip technology used for power steering, brakes and other important vehicle operations — have caused new car inventory at dealerships to dwindle, CNBC reports. Buyers turning to used-car lots to find a more affordable option haven’t had much luck, either.
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Semiconductors are present in almost every electronic device. In 2020, more than 946 billion were made, according to data from Seeking Alpha. When dealerships and manufacturers were shut down last year during the pandemic, chipmakers focused on producing parts such as computer and gaming consoles for the consumer electronics industry.
The chip shortage is causing a lot of problems in the automotive industry. According to experts at Edmunds.com, an online resource for automotive information, new vehicle inventory on sale at dealerships nationwide was down by 36% in March 2021 compared to the previous year.
At Cars.com, listings for cars selling below $25,000 dropped roughly 19% from February to March, and there are just 38 days’ worth of inventory compared to the usual 65 to 70 days’ worth, stated Kelsey Mays, senior consumer affairs editor for Cars.com, as reported by CNBC.
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However, not all automakers or car models have been impacted equally. “It could be a good time to explore other brands if you’re usually loyal to just one,” said Ivan Drury, senior manager of insights at Edmunds.com, as reported by CNBC.
Buyers looking for a better deal can take advantage of manufacturers’ deals. Chevrolet has discounts for the 2021 Equinox that range from $3,500 to $6,500 for most versions through May 3, according to Cars.com and reported by CNBC.
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Potential buyers can also bring down the cost of a car purchase through a trade-in, with an average amount of $17,000, according to Edmunds.com data, or try to find a 0% financing deal. Experts at Edmunds.com advise potential buyers to start shopping sooner rather than later, as the chipset shortage is likely to affect pricing and inventory for the remainder of the year, CNBC reports.
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This article originally appeared on GOBankingRates.com: Car Buyers Beware: High Prices, Limited Inventory Expected This Spring