Vehicle inventory shortage

A vehicle inventory shortage can happen when parts shortages are combined with high consumer demand. This can affect your options when buying a new or used car.

New Car Shortage


Many people looking to buy a new or used car are finding it to be a frustrating experience. The car shortage in America, due to the pandemic and other issues, has significantly affected the car inventory across the country.

The car market is like any other market, and it operates by the same simple principles of supply and demand. Since supply is drastically low right now and demand is high, you probably won’t get the best deal on a new car right now.

So what caused this vehicle inventory shortage and when can we expect it to end?


What caused the vehicle inventory shortage?

The COVID-19 pandemic is the primary source of the inventory shortage. This is the case for the automobile industry as well as many other industries with complex supply chains. 

When the pandemic hit, many automakers had to shut down their factories for the health and safety of their workers, and to address the decline in demand for new cars.

With production on hold, automakers canceled orders for semiconductors, a major component in manufacturing automobiles.

At the same time, there was a significant spike in demand for computers and other electronics. People were not only working from home, they were also spending the majority of their off-time sheltering-in-place. The need to work and to be entertained created a high demand for products containing microchips, and suppliers focused primarily on the consumer electronics markets.

When automakers were able to safely reopen their factories, they found themselves facing a new challenge: those orders for semiconductors they canceled at the start of the pandemic simply couldn’t be fulfilled.

And we’re not talking about thousands of microchips or even hundreds of thousands. Auto manufacturers sold more than 14 million cars in 2020, which required hundreds of billions of microchips.

So you can imagine just how significant the shortage of chips is to both the auto industry and the auto buyer.


When will the car shortage end?

The honest answer is that it’s hard to say. There are many different factors and industries at play here. Semiconductors are used in cars, video game systems, smart TVs, computers, tablets—pretty much anything electronic. Since so many industries rely on them, the chip shortage is highly significant when it comes to supply and demand.

It’s likely that the car inventory shortage will continue well in to 2022, perhaps even longer. Even though you’ll probably see higher sticker prices and fewer deals, that doesn’t necessarily mean that you should wait to buy a car, especially if you really need one.


What are your options during the vehicle shortage?

Shopping for a car right now – whether it’s new or used – is more difficult than previous years. The car shortage has brought higher sticker prices and fewer deals for consumers.

Essentially, you have three options:

  • Consider models that aren’t in high demand
  • Fix your current car
  • Hold off on buying (if you can)


If you can’t wait or if fixing your current car just doesn’t make financial sense, you might want to look at models that aren’t in high demand. High-demand models include all-wheel-drive SUVs and pickup trucks. Consider looking at sedans or two-wheel-drive SUVs.

If you’re looking for a new car because your current one has some mechanical problems, you might just want to focus your money on fixing those issues. Investing a little bit to keep your old car running until the shortage ends could save you money in the long run.

If you’re just tired of your current car or it has some cosmetic issues but runs fine, you might just be better off weathering the storm and waiting for the shortage to end.



The vehicle inventory shortage is largely due to the COVID-19 pandemic and the low supply of semiconductors. Consumers are noticing a significant lack of new & used cars, higher sticker prices, and fewer deals.

It’s hard to say how long the shortage will last, but it’s likely to extend well into 2022. You do have some options when looking for a new or used car, though. Just be patient and perhaps expand your search to models you weren’t considering.

If you’ve found the right new or used car during the shortage, congratulations! We have speedy finance options to help get you on the road . You can also check out our free car buying services, like AutoLand and our partnership with Enterprise, to help ease the search during these trying times.

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