inventories

Car buyers are giving up as chip shortage dwindles new car inventories further

Car dealership

The days of cars stocked in the back are no longer.


Ken Biddulph/EyeEm/Getty Images

It’s no secret the new car buying process is currently a challenge. With no end in sight to the semiconductor chip shortage, new car inventories remain thin and average prices inch up from the $40,000 mark. Now, new data shows car buyers are starting to simply throw in the towel on the process. According to Kelley Blue Book and Cox Automotive data from Tuesday, nearly half of new car shoppers are walking away.

Instead, they’re prepared to postpone their new car search for months in hopes the chip shortage will ease and supplies help find an equilibrium once again. “The latest KBB research indicates that most consumers anticipate negative impacts on the automotive market due to the chip shortage, from increased prices to inventory shortages and longer delivery times,” said Vanessa Ton, senior industry

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Car dealerships have turned ‘cutthroat’ amid a buying frenzy and dwindling car inventories

Car Dealership
  • The frenzied car market is pitting car salespeople against one another, Bloomberg reported.

  • New and used car prices have skyrocketed during the pandemic amid a shortage of vehicles.

  • Some dealers are even shelling out to buy leased vehicles years before the end of their term.

  • See more stories on Insider’s business page.

The pandemic has upended the market for new and used cars, sending prices skyrocketing and inventories dwindling.

A buying frenzy – coupled with soaring prices and a historically low supply of vehicles – has turned car salespeople into enemies, one dealership employee told Bloomberg.

“It’s really cutthroat,” Jared Luner, a salesman at Columbia Honda in Missouri, told the outlet. “Normally we’re all friends and coworkers, but right now, when someone pulls up, it’s a little edgy.”

Luner said he recently had a fellow salesperson sell a vehicle out from under him. Hawking cars was always a

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More car buyers looking out of state as inventories trail demand

Cars.com found 10% of recent car buyers went over state lines for their vehicle.

Nearly 1 in 10 recent car buyers, according to data from Cars.com, purchased their new vehicle in another state — with more than half driving at least 25 miles to a dealership.

Kelsey Mays, assistant managing editor of the automotive website, said increased demand and a global microchip shortage are to blame.

“There’s just no inventory right now,” Mays said in an interview with ABC News. “With lower inventory comes higher prices, with higher prices comes consumers having to travel more.”

Many microchip manufacturers halted production during the pandemic, Ivan Drury, senior manager of Insights at Edmunds, told ABC News. Car companies cut back on chip orders while other technology companies bought as many chips as they could.

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