When is the best time to buy a new car amid chip shortage? Expert weighs in

ByCourtney Carpenter KTRK logo
Thursday, May 19, 2022
Expert weighs in on when you can buy a car amid chip shortage
The chip shortage has changed up the car shopping game as we know. Car prices are up, leaving people wondering when is the right time to buy?

HOUSTON, Texas -- You've likely noticed some local car dealership lots are nearly empty. Why? The microchips that go inside cars are still in short supply.

As the shortage continues, car prices are up, leaving a lot of people wondering when the shortage will be over and when is the right time to buy.

"I have never seen anything like this in my life," said Alan Helfman, the president of River Oaks Chrysler Jeep Dodge and Ram.

This chip shortage has changed up the game he knows well. For starters, he has a fraction of the inventory he did before the tiny pieces of technology became so hard to come by.

Helfman says normally he'd have 650 to 700 vehicles in inventory, but now it's "probably 100 (vehicles)."

Less supply means higher prices. So, if you are in the market for a new ride, should you wait?

"If I was personally making the decision, I would hold off another eighteen months or so," said Margaret Kidd, a supply chain and logistics professor at the University of Houston.

She said the labor shortage and availability of raw materials play a part in the ongoing issue.

"I don't see it getting better anytime soon. I would estimate 18 to 24 months before you're going to see those car lots full with all of those beautiful colors and great selection," said Kidd.

Kidd said there is light at the end of the chip shortage tunnel, but how we buy and sell cars may change.

"Americans have gotten very spoiled and they are used to many people trading in their car every couple of years and our new reality is, that is a luxury," explained Kidd.

She said automakers are focusing on their most profitable models, so there will be less to choose from.

"The new normal is probably going to mean a little less selection, but it will certainly improve from where we are today," said Kidd.

A silver lining of the shortage is if you have a used car to sell...

"We're real low on used cars, so we need used cars, so we're paying up. We're working it out. Especially if you have a nice clean car, low miles, even with high miles," said Helfman.

So if you're in the position to have one less set of wheels, you could cash in while the chips aren't falling.

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