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Microchip shortage causes used car prices to spike

Published: Jul. 6, 2021 at 5:33 PM EDT
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LANSING, Mich. (WILX) - The microchip shortage is not just affecting new car sales, it’s causing the price of used cars to increase significantly, causing grief for those who are looking to buy a newer vehicle.

Lansing resident Heather Lyons totaled her car and wants to buy a used car, but it’s been a struggle. She said it’s costing her $4000 more to purchase one this year compared to last year.

“It really is bad. My car payment last time for a decent vehicle was something I could afford and this time it’s going to be a worse vehicle for more than I was paying before,” said Lyons.

Motorcars of Lansing says prices are the highest they’ve seen in a long time.

“I’ve never seen prices this competitive and high in the 21 years we’ve been in business,” said Motorcars Group President, John Badawi.

Badawi with Motorcars says used car dealerships are paying more for cars because there are fewer options.

“Now they’re resorting to auction blocks, which resulted in prices at the auctions to go crazy,” said Badawi.

The community continues to face higher cost and less options as they search for their next car. Some say they are continuing to fix their current cars in hopes to save money. Badawi tells News 10 he is concerned local small lots may not make it.

“These big franchise stores will target and buy out the one, two new car guys that just can’t make it in a market with no new cars. Nobody’s benefitting with chip shortages, nobody’s benefitting with a lack of trade-ins,” said Badawi.

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