A woman in Omaha, Nebraska walked away unharmed from an accident that had totaled her car but it left her without transportation to get to and from her meagerly paying job. Left with no option she went shopping for a reliable used auto with a price tag that would fit within her constrained budget. She allocated $7,500 for the car and figured it was enough to get something that would suit her needs and that she wouldn’t have to worry about breaking down on the side of a highway. She was wrong. Very wrong.
She had to buy something but she hadn’t counted on spending every last cent she had on a 2013 Toyota Scion with 160,000 miles on the odometer. It was the best deal she could find and this is only because the owner of the used car lot had felt sorry for her and cut her a break.
Jeff Schrier, the owner of the lot, said they made no profit off of the sale. “We just helped her out.”
The woman’s car buying experience was no different than what consumers are experiencing across the nation. Where purchasing a clean better affordable used auto has always been the way to go for many, the option’s off the table. Affordable is a term of the past with the average national price for a decent used car holding firm at $29,000, almost 40% higher than last year’s average.
This is not to say that buying a used vehicle is still not the least expensive way to go. New car prices have hit an astounding national average cost of… get this… $46,000. And even this absorbent amount won’t buy anyone a nice Landrover or a Toyota Forerunner. If 46K is all you can swing you need to consider looking at a no-frills sedan with an AM/FM radio only.
Schrier said, “I’ve never seen anything remotely close to this – it’s craziness. It’s quite frustrating for so many people right now.” Schrier speaks as the voice of experience having spent 35 years in the auto industry. He’s also aware of the experts saying how these ridiculous prices aren’t going to ease up any time in the near foreseeable future.
Here’s the deal. The auto industry, due to pandemic lockdowns, played second fiddle to the computer industry that uses the same microchips used in newer cars. Without these chips, the cars ars useless hunks of steel. They control everything. As multitudes of people were forced to work from home they needed the proper equipment to do so. You guessed it. The demand for laptop computers soared to Uranus, and voila, they hoarded all of the computer chips.
But here’s where the problem worsened. The US wasn’t the only country to pull the plug and send workers scurrying to the confines of their homes. So did China where the chips are manufactured. Every stinking one of them says “Made in China” and producing them isn’t the kind of work that can be done from home.
But the problem doesn’t end here. Many companies worldwide discovered how letting employees work from home wasn’t so bad. Productivity didn’t suffer and their overhead decreased by turning off the power at the office. As a result of their pleasing discovery, many firms have ditched their offices altogether and are saving bundles. Good for them. Bad for the auto industry.
The demand for computer chips is greater than China’s ability to produce them fast enough. Now bear in mind how almost every computer on the planet is manufactured in China and you have a good idea about who’s calling first dibs on the chips shooting out of those factories.
Now that you have a better understanding of why this isn’t a good time to go car shopping, you may want to at least consider changing the oil in that old clunker you’ve been nursing along.
We forgot to mention how even with this entire conundrum putting a serious squeeze on auto industry workers and America’s bleeding economy as a whole, Joe Biden, who’s always been kinda partial to his Chinese buds anyway, is still watching from the sidelines. He needs to up a copy of “The Art of the Deal” and negotiate some way of getting China to share. But first, someone will need to make him aware of the problem.
By a show of hands. Who misses carbureters?