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Used car prices rise as new vehicles are in short supply

POCATELLO, Idaho (KIFI) – Dealerships in the area are having a hard time maintaining their inventory of new vehicles, so buyers are turning to used vehicles instead.

“If you’ve been driving around town, you’ve found stocks are running out. This is mainly due to the shortage of new cars,” said Brian Johnston, general sales manager for Phil Meader Subaru on Yellowstone Ave.

New cars require hundreds of semiconductor chips, which are in short supply around the world. The auto industry’s shortage is expected to cost the auto industry $ 110 billion in revenue in 2021, according to consulting firm AlixPartners.

Phil Meader Subaru usually has 45-50 new cars on the property, Johnston said. On Monday they only had 12 to choose from.

Since there are few options for new cars, buyers are choosing used cars instead, which drives up the price of old cars.

“Your bargain is worth a lot more than it would have been,” said Johnston.

However, the scarce supply and high prices do not stop people from upgrading their vehicle.

“The last month has been pretty unreal. We had record numbers and almost no cars were sold. Even our used cars were almost exhausted, ”said Johnston.

AlixPartners assumes that the chip supply chain will slowly reopen over the remainder of the year and until 2022.

“Production is ramped up. We have cars in the pipeline, but it will only take time, ”said Johnston.

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