Car prices soar amid the pandemic, experts don’t expect them to improve anytime soon

Hartford

HARTFORD, Conn. (WTNH) — Car prices have soared amid the pandemic and things don’t appear to be improving anytime soon. But, what’s behind the issue, and what does it mean for Connecticut?

The year 2023 sounds like a long way away and that’s how long experts say you’ll have to wait for car prices to drop all due to part shortages amid the pandemic.

Computer chip shortages in the spring sent auto prices soaring. Now, the Delta variant is surging in several Asian countries that are the main producers of auto-grade chips, making matters even worse.

“There isn’t any optimism that this is going to correct itself anytime in the near future, so what does that mean for consumers? Limited inventory on lots because of falling manufacturers production and also incentives,” said Jeff Aiosa.

Jeff Aiosa owns Mercedes-Benz of New London and is the Connecticut Director of the National Automobile Dealers Association. He says dealers typically sell over 17 million new cars nationally, but that has dropped to about 16 million.

“So, we’ve lost over a million cars,” Aiosa said.

The average new car costs of $41,000 and if you were hoping to get some incentives to buy one, dealers are cutting back incentives due to low inventory. But, it’s not all bad news.

“It also helps significantly on the trade-in values because obviously, the used car constraints are due to the lack of trades coming in that we would usually see from new car sales,” Aiosa said.

Last month, trade sales were up almost 70 percent compared to August 2020. Aiosa expects to see shortages continue well into next year.

“Act quickly because vehicles literally come in on the car carrier, get prepped and go right out because they’re presold,” Aiosa said.

There’s been a lot of talk about high car rental prices. Expect those to stay high so long as these shortages continue.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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