3 Stocks to Buy as Used Car Prices Continue to Soar

Used car prices are expected to continue climbing in the near term as the global semiconductor chip shortage persists and demand for private vehicles rises amid the resurgence of COVID-19 cases. So, we think it could be wise to bet now on quality used car retail stocks AutoNation (AN), Group 1 Automotive (GPI), and Sonic Automotive (SAH). Read on. – StockNews

The demand for private vehicles is rising as the COVID-19 omicron variant cases surge. This, together with the ongoing semiconductor shortage and supply chain constraints that have been hampering the production of new vehicles, are causing used car prices to rise.

Referring to the Manheim index of used car prices, market researcher Jim Bianco said on Dec. 26, “In the last four months, they’ve gone up in price more than 20%. Not only is that more than the S&P, but over the last four months that’s more

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Carmakers’ chip shortage that caused prices to soar may be ending

Automakers may soon get a lot more of the chips they need to get cars for sale.

Why it matters: Winter weather, a fire and the COVID-19 pandemic have contributed to a shortage in chips that has stalled the production of new cars.

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Driving the news: Chip giant Taiwan Semiconductor reported its Q2 earnings on Thursday, and with it announced relief was coming for automakers in need of chips.

  • On a call with analysts, CEO C.C. Wei said its production of micro-controlling units for cars would be up 60% in 2021 compared to last year.

  • “By taking such actions, we expect the automotive component shortage from semiconductors to be greatly reduced for TSMC customers starting this quarter,” he said.

  • Taiwan Semiconductor controls a little over half of the chip production market share as measured by dollar value.

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