Ongoing shortage of new and used vehicles drives prices up and options down

Click to play video: 'Ongoing supply shortage of new vehicles leads to price hikes, fewer options'
Ongoing supply shortage of new vehicles leads to price hikes, fewer options
WATCH ABOVE: The ongoing supply shortage of new and used vehicles is leading to frustration for many buyers as they face fewer options, long wait times and higher prices. Tomasia DaSilva has one prediction of how long this could last – Apr 12, 2022

The ongoing supply shortage of new and used vehicles for sale continues to cause a lot of roadblocks for buyers, including fewer options, long waits and higher prices.

Calgarian Jesse Waddell was recently in the market for a new vehicle. He told Global News it was a frustrating and different experience.

“We went to a few dealerships just to see some of the models,” he said. “We hoped we might be able to get in and just sit in it, feel it, touch it, maybe go for a test drive.”

Waddell said they weren’t able to do any of that.

“(Dealerships) really don’t have anything. You might be lucky to find one vehicle that’s even in the model you want, but forget the trim and all the other fixings.”

Jesse Waddell sits in truck as he waits for new vehicle to arrive. Global Calgary

Waddell said most dealers also told them it would take about nine months to a year to get a new vehicle in.

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The family eventually narrowed down what they wanted and headed to Staightline Kia, where Waddell said they got to do a test drive and were quoted a much shorter delivery timeline than some of the other dealerships.

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But, he added, there was a catch.

“We essentially submitted an order for three different vehicles,” Waddell said. “Whichever one you can get in first — we will take.”

Supply chain woes

Supply chain experts told Global News new vehicle supply shortages began at the start of the pandemic, when demand was forecast to dwindle significantly.

Gerry Duffy, who teaches supply chain management and logistics at SAIT, said many automakers cut production and in turn, so did other manufacturers that supply them with parts.

He pointed out when demand picked up again, supply just couldn’t keep up.

“A lot of the automotive industry is still struggling to get their hands on enough semi conductor material in order to make all of the components that they require to put their cars together.”

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Ongoing supply issues result in empty lots at some Calgary car dealerships. Global Calgary

Duffy said it takes time for many of these plants to either ramp up or build new facilities and therefore it could take a while for supplies to replenish.

A shortage of new vehicles has also led to a hike in price for the ones that are readily available on lots. Duffy said a quick turnaround time can mean significant hikes from the manufacturer’s suggested retail price (MSRP).

Waddell said because he ordered the way he did — and not right off the lot — he was able to pay very close to the MSRP for his new vehicle.

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Used car rush

Prices have also risen for many used vehicles due to supply and demand. Many dealerships have put out the call for used vehicles and many car owners are deciding to get more bang for their buck by posting privately.

One Calgary dealership advertising the need for used cars. Global Calgary

“There’s lots of people that are very happy. They’re saying, ‘My car was worth $30K, now it’s worth $35K,'” Duffy said.

“The downside to that is once you’ve sold your car for $35K, then you need to get another car.”

Waddell went the safe route by trading in his truck. Not only was he able to lock in a price for his trade-in, he was also able to put the tax towards his new vehicle and keep his truck until his new Kia arrives.

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‘Hopefully two to three months,” he said. “But still no guarantee.”

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