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Why There Is a Car Shortage (And What You Can Do About It)

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2021 has quickly become the year of consumer goods shortages. The price of lumber has quadrupled. PS5s are scarce and being sold at inflated prices on eBay. And it’s hard to get a car anywhere—new, used, or even a rental. Most of us are aware that COVID is somehow at fault, and that is true. But COVID is only the straw that broke the camel’s back. The reasons behind our car shortage are slightly more complex. Fortunately, there’s an easy way of dealing with it. 

The Surprise Rebound 

Back in early 2020, car manufacturers drastically cut their production. The reasoning was simple: people stopped buying cars. The pandemic was new and scary and at the same time the recession was so sudden and sharp some economists were worried about a depression. Sales were down by as high as 90 per cent in some countries

But after the summer, sales sharply rebounded. Certainly good news for auto-manufacturers, except for one problem: when they reduced their sales they cancelled orders from their many suppliers, including for their electronics. When they started reordering parts, they found that they were at the bottom of a lengthy wait list for new semiconductors. This would be a problem in and of itself, but there’s also the issue of a semiconductor shortage. 

The Semiconductor Shortage

Modern electronic equipment relies on semiconductors. Cars, phones, computers, game consoles, medical imaging equipment, aircraft, and household appliances all rely on semiconductors. Unfortunately, a perfect storm of factors has led to a semiconductor shortage. First, a trade war between the US and China led to Chinese firms stockpiling semiconductors. Next, the pandemic led to a massive boom in the sales of home entertainment devices such as the Nintendo Switch. On top of that, a drought and a fire hit Taiwan, home of Taiwan Semiconductor Manufacturing Company (TSMC) and Micron. As a result, semiconductor manufacturing took a hit. 

Tech companies don’t foresee the end to the semiconductor shortage until 2023. Until then, car makers will have to idle their factories sometimes, or produce cars which sit on factory lots until the missing electronics parts are delivered.

So What’s a Car Buyer to Do?

All this news is pretty upsetting if you’re in the market for a car. New cars are hard to come by because not as many are being made, and the ones that are being made tend to be fully optioned out as the manufacturers attempt to maximize margins. Used cars are hard to come by because people are holding on to them since they can’t buy new cars either. You can’t even rent a car sometimes because car rental agencies have the same problems. 

With that said, a shortage just means that there are fewer cars available, not a complete absence of cars. If you’re in the market for a new Corolla, for example, your local dealer in Dundas, Ontario may not have one—but there might be some options over in St. Catharines. You probably aren’t keeping track of all the Corollas on sale in a dozen cities around you, but services like Unhaggle are. 

By using Unhaggle, not only can you find makes and models that will be in short supply for the foreseeable future, you can also see what dealers and other customers are paying. With this information, you can make the best possible choice and skip the stress of searching for the exact car you want—never mind the pressure to buy when you think it might be your only chance. 

With the automobile market looking precarious and a semiconductor shortage lasting until 2023, a potential car buyer needs every possible advantage. With Unhaggle, advantage is exactly what you get. 

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