Worldwide Shortage Of New Cars & Trucks, Drives Demand, Prices For Used Vehicles

MIAMI (CBSMiami) - A global microchip shortage has affected nearly every major automaker, resulting in a slowdown in production of new cars and trucks. As a result, demand for used vehicles has soared in South Florida and around the nation, along with prices.

So, harder to get new cars and trucks are driving demand in the marketplace.

"Your used car is worth more now than it was four months ago," said Bill Pace, a car dealer.

"Over the last 90 days, used car prices have increased by about 10 percent," said auto dealer Mike Offutt.

How about here in South Florida?

"Right now, the way the market is, they will get a lot of money for their vehicle," said Nestor Luna, General Manager of Midway Ford in Miami.

Analyzing 1.2 million used car sales, from April 2020 to April 2021, the average used car increased 16.8% or $3,926.

Let's compare the year-to-year cost of the average used car. In April 2020, it was $23,371.00 and in April of 2021, it rose to $27,297.00.

"The demand because of lack of new cars is switching over to used, and the used car value has gone up last year 17%," said Luna.

Thousands of new cars and trucks built are sitting in the pipeline because of the lack of microchips that control car components.

Recently, bad weather destroyed a chip plant in Texas. "The other chip producer is in Japan and they had a major fire that knocked them out," said Luna.

That mixed in with COVID labor slowdowns has sapped the new car market.

"Full-size pick-up truck, we are a little light. The Ford Explorer, in our case, a little bit light," Luna said.

Used and new car dealers will tell you Americans want to hit the road, emerging from pandemic isolation almost "any ride" will do. New or used.

"I know that once the chip problem resolves, the flood gates will open," adds Luna.

The rental car agencies will likely update their fleets and shed their used vehicles impacting the used car market and prices will drop.

As far as the new cars, Luna said, "We are going to get relief in July. Most manufactures are stepping up production, but the chip problem is not going away overnight."

Consumer Reports says low-interest rates on loans are also driving the demand for people to purchase cars, new ones, when available, used if they must.