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Demand for cars continues to rise while supply remains critically low

Posted at 5:53 PM, May 14, 2021
and last updated 2021-05-14 18:56:10-04

KILLEEN, TX — The demand and cost of new and used cars is going up but supply just isn’t there.

The supply chain shortage for new cars is also making used cars a little more expensive.

During the pandemic companies that make computer chips for new cars slowed or stopped production causing a supply chain issue now that is affecting even the used car industry.

”Demand for vehicles going up and limited production of these chips for cars, makes it difficult for them to have lots of cars on the lots for people to choose from,” said Robert Tennant, Assistant Professor of Finance and Economics at Texas A&M University-Central Texas.

It's a shortage that used car dealerships like Dodge Country Used Cars in Killeen are definitely noticing as they try to keep enough vehicles in stock.

”It’s a short demand on new cars so that trade that we normally would get, we don’t get. So, business has been still rolling but it is a shortage of used cars.” said Lorenzo Green, Salse Manager, Dodge Country Used Cars.

They are selling a good amount of cars at Dodge Country but they said customers seem to be looking for one style the most.

”Lately I've been seeing a lot of people coming and shopping for used trucks. Used trucks, used trucks, used trucks. Cars too because the gas prices have been spiking” said Nathan Gonsalves, Salesman at Dodge Country Used cars.

Experts say that this isn’t the first time we’ve seen the auto industry hit like this.

”Last time we had this phenomenon happen was when we did the cash for clunkers during the global financial crisis back in 2008, 9, and 10. When the government bought up used cars and destroyed all the old ones,” said Tennant.

With the demand for used cars going up dealers stress doing your research before buying a car.

”I would just say, know your facts. Check your Carfax. That is something that we’re good about here. We’ll present your Carfax. Make sure you’re not buying anything that is horrible.” said Gonsalves.

Experts say we may be seeing the auto industry hit by a supply chain shortage now, they expect to see many other industries hit to over the next 6 to 24 months