COLORADO SPRINGS — If you're looking to buy or sell a car before the summer road trip season you'll want to be prepared for a shortage of new vehicles and skyrocketing used car prices. News 5 takes a deep dive into the car shopping market.
There are less new cars, but the number of people looking to buy a car remains high. It's caused used cars to actually increase in value. It's why experts say you need to do your homework on any car purchase right now.
A major factor in all of this is the shortage of microchips also known as semiconductors caused by the pandemic and a massive fire in Asia where the chips are made. They help to run steering systems, brake systems, dashboard electronics and even car keys.
The chip shortage means new cars simply can't be produced in the numbers we are used to.
The general manager of Adam & Son Auto Sales in Colorado Springs says the car shopping market right now has everyone on edge, but there is money to be made for those who are able to sell their used cars.
"People have been in this business for 40-plus years and they have no idea what's coming, what's going, all we can do is understand what's here now. The values have gone through the roof," said Adam & Son GM Scott Fahrenholtz. "I feel it's going to stay this high throughout the summer and then will start maybe going down, so now is the time to sell if that's what you're planning on doing."
According to Edmunds data, a company that tracks industry trends, the semiconductor shortage reduced new car inventory by 48% compared to April of last year. The biggest inventory shortage was among new trucks, down 64%, then SUVs down 44%, and passenger cars are down 42%. With this inventory 12.7% of car buyers paid above sticker price last month.
Meanwhile, here's an example of what this has meant for the value on a used 2018 GMC Sierra 1500 crew cab, Kelley Blue Book offers that have gone up three separate times in the last few weeks.
Fahrenhotlz says used vehicles can increase in value right now as long as people are taking good care of them.
"Not properly keeping your vehicle maintained and not up to par, that's the number one thing I've been seeing now," said Fahrenholtz. "A lot of people have been kind of deferring that maintenance and that's just kind of setting yourself up for failure in the long-run. You want to stay on top of that maintenance and get a CARFAX on that vehicle so people can absolutely see the history and what you've done with it."
That's some advice for sellers, but what if you're looking to buy a vehicle in the next few weeks or months?
Experts say these are some things to keep in mind...
First, with limited options and high prices make sure to do your research and be prepared to act quickly.
Also, expand your search radius. You may have to look for that car in another city or community.
If you're working with a dealership, you can save money by maximizing the value of your trade in.
Finally, ask yourself is the timing of this purchase is right for you? There may be some advantages in waiting a little while to make that vehicle purchase.
If you're looking to buy or sell a car right now there is expert advice available and even local businesses who can help you to do both:
Adam & Son Auto Sales
4391 Austin Bluffs Pkwy
Colorado Springs, CO 80918
Helpul research information and links: