In case you haven't heard, there is a shortage on new vehicles right now. Why is this happening? I'll get more into it later but basically it comes down to microchip shortages and getting manufacturing plants back up to capacity.

When COVID-19 first hit, manufacturing and industry really slowed down. There's several reasons for it. A plant works when everyone is working together on the line. If you all of a sudden need to space out workers so COVID-19 doesn't spread, then you have less workers on the line. It slows down. Not only that, but these large cafeterias where workers normally take their breaks don't work anymore. There would be too many people in them, so they needed to start staggering their workers breaks, further reducing the efficiency of the plant.

Weekly I talk with Chris Kari, owner of Kari Toyota, and he's been providing me with a lot of this inside information that consumers like us don't think about. Here's a few takeaways from our morning conversations:

  • Used car prices are up, and you can get a lot for a good used car trade that will even offset whatever increased prices there are for new vehicles.
  • You can get a new vehicle, you'll just need to claim an incoming one from the plant.
  • There are still some good used cars for sale.

Today he mentioned that in just the first 5 months of this year they've already sold more new vehicles than they did in 2019, before COVID-19. That shows how much the demand is right now for new vehicles. So it's a different buying situation now where there isn't a lot of new cars on the lot, but you can still find one in a lot of cases.

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A lot of the auto industry is struggling with a huge microchip shortage. How does this happen? According to Car and Driver, it's because when they slowed production at plants some of the automakers like Ford cancelled their microchip orders. Meanwhile electronics companies swooped in and took those orders over. Now that production is ramping up, auto makers lost their place in line for microchips.

Hopefully as we move forward we can try to get to some sense of normalcy and return to a less frenzied way of life.

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