Auto Buying And The Current State Of The Marketplace

Will the auto market change once chips and other essential parts are available? Will it help manufacturers catch up to demand? 

Buying a car is already a stressful endeavor, add a global pandemic and a supply shortage and things go from bad to worse. According to a recent article from NPR, the upended car market has been so good for automakers' margins, many believe some of the adopted high prices and business practices of late will become permanent even when supply chains go back to normal. So no, it’s not likely we’re going to see things go back to normal any time soon.

Heres why: 

Auto makers reported record earnings in 2021. In fact, auto executives have told investors that these very profitable months have made them realize they may have been producing too many cars in the past. At some points in 2019, there were 4 million cars waiting to be sold; the current stockpile is around a million vehicles and the focus is sell those cars at MSRP (Manufactures Suggested Retail Price) often times with a Dealer Market Adjustment (a premium added on by the dealership) which depending on the brand can range from $5,000 - $150,000. 

The New Normal for New Cars and Trucks.

Some things to consider even when the chip supply chain issue is corrected: 

In a recent article from Consumer Reports, Buying and negotiating from MSRP or “sticker” and traditional discounts on the window sticker price have been harder to come by and typically smaller. In fact, they’re seeing some cars sell for closer to the manufacturer’s suggested retail price (MSRP), and in some cases even more.

Features that were once standard options may either go away or be added as extra(as in extra costs for you!) ie: heated and ventilated seats and wireless mobile phone charging. The global chip shortage is also affecting popular high-tech features as some automakers opt to withhold them or pause production altogether. On top of that, auto makers say the shortage of parts and price increases for raw materials is driving up the cost and price of a new Car or Truck. Manufacturers like Ford, Audi, General Motors, and BMW are cutting features, delaying production, and even raising prices in response.