DENVER (KDVR) — If you’re in the market for a new car, you won’t be finding the typical Memorial Day deals this weekend. You may even have a hard time finding the car you want.
Inventory is at a record low world-wide, thanks to a microchip shortage. Some dealers say they will be completely out of cars by the end of July.
This is an historic problem for the auto industry. A fire at a Japanese microchip manufacturing plant has put the brakes on new car production here in the U.S.
“We haven’t had a supply product supply short fall this intense in automotive history,” said Tim Jackson, President and CEO of the Colorado Auto Dealers Association.
Dealers like Freeway Ford in Denver say their inventory is about 10% of what it normally is, and based on how things are going now, they could be out of cars in a month or two.
“It used to be a person would come in, ask for a car in certain color. If we didn’t have it, we could go to another dealership and do a dealer trade,” said Anthony Testa, with Freeway Ford. “Since everyone’s in the same situation we are in right now, that’s not happening. What we have is what we have. We are completely dependent on people bringing in trades, buying off the streets, keep everyone employed.”
The Colorado Auto Dealers Association says some brands are affected more than others.
“For example, Toyota had a larger supply in storage instead of ordering just-in-time fashion,” Jackson said.
But experts predict all brands will sell out with no real solutions in sight.
“It will take some time to get out of this problem, and the estimates I keep seeing and hearing are up to two years,” Jackson said.
“I know Dodge, Ford, the other big manufacturers domestically are trying to work together to figure out a solution, but there’s not one yet. And with the backlog, it’s going to be a year or two before we get caught up,” Testa said.
Dealers are concerned about filling customer’s orders, but they are also worried about their employees and the employees at their vendors.
“We’ve already had vendors call and say they are cutting back on hours, on staff, because there’s nothing there for them to do. We’re talking about not just a thousand, ten thousand, hundred thousand. We’re talking about millions of jobs across the country in jeopardy, unless this gets fixed,” Testa said.
The best advice for consumers: don’t wait.
“If you want a new vehicle, buy as soon as possible, because there’s nothing else coming,” Testa said.
This is driving up the demand and prices for used cars. If you have a spare car, especially a late model used car, they are worth a lot of money, so now may be the time to sell.