How the Chip Shortage is Affecting Car Buying in Ontario

How the Chip Shortage is Affecting Car Buying in Ontario

Posted on September 7, 2021

Have you heard about the global semiconductor shortage? Know why a chip shortage is affecting car buying in Ontario? Know why a factory in Taiwan is increasing the value of your old car?

If you’re planning on selling your old car and/or buying a new one, this post is for you!

Chips are the simple name for semiconductors as they are used as computer chips among many other things.

Semiconductors are essential for anything electronic. They are used in everything from phones to TVs, computers to smart refrigerators. They are also used in cars.

Semiconductors are used a lot in cars. They are present in antilock brakes, dynamic driving systems, engine ECUs, digital dashboards, radios, CD players, digital audio systems, navigation and anywhere that uses electronics.

In a new car, that’s almost everywhere!

The semiconductor shortage

The global pandemic exacerbated an already stressed supply chain for semiconductors. As we move more towards a technological future, the demand for circuits and circuit boards means a demand for semiconductors.

Demand was already high and production running at capacity. And then the pandemic hit. Every part of the supply chain from those who mine the minerals to make the chips to those on the production line that make them, the truck drivers that ship them, the pilots that fly them, the sailors that transport them.

Every part of the global supply chain was impacted by COVID 19, which has caused the supply chain to fall far behind.

Semiconductors and your next car

As there is a shortage of semiconductors, automakers are just one of many industries all trying to get hold of them. They have had to join a queue and wait their turn.

That means production delays on new cars. Some plants were idled for a few days, some for longer, which caused their own shortages.

The bottom line is that there is a shortage of components for new cars so there’s a shortage of new cars.

Lead times that would usually be counted in a few weeks are now stretching into months.

Which has led many people who would have bought a new car to buy a nearly new one instead. Or they are keeping hold of their current car until everything calms down.

Which has caused a shortage of its own.

Used car demand

If people aren’t selling their old cars or trading them in, there isn’t the supply of used cars there used to be either. This has led to a shortage of good quality used cars.

People are buying more used cars but because some people are keeping hold of theirs, there isn’t the supply there used to be. Hence the chip shortage affecting car buying here in Ontario.

All this means that if you decide to sell your old car to a dealership, it’s worth more than at any time before.

It also means that if you have a used car you want to sell, there has never been a better time to do it!

Contact Unique Chrysler for help, advice and competitive car finance and leasing.

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