New car shoppers know that a global microchip shortage means high car prices, and they don’t expect them to come down even as supplies return to normal. More than ever plan to order their next car, and fewer are willing to pay more than sticker price than were last November.
Those are among the conclusion from Cox Automotive’s Chip Shortage Consumer Impact Study. The study has been tracking consumer behavior and attitudes regarding the chip shortage and its consequences since it began in the summer of 2021.
Cox Automotive is the parent company of Kelley Blue Book.
Among the takeaways:
Shoppers know about the shortage, expect it to last
Sixty percent of shoppers were “very aware” of the microchip shortage, and 26% were at least aware of it. Awareness has increased with every new edition of the study since it began last April.
Of those who expressed an opinion, 35% expect the shortage to continue for more than a year, and another 18% say it will last at least seven more months. They’re likely right – experts expect it to continue through most of 2022.
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Fewer are willing to overpay
Earlier in the shortage, up to 42% of shoppers said they were willing to pay over MSRP for a new car. In the latest round, that number has dropped to just 28%. That is beginning to show. The average new vehicle price has begun to decline, though it remains more than $5,000 higher than just one year ago.
But they still don’t like to wait
Only 45% of new car shoppers say they’ll delay their new car purchase due to high prices. Of those, nearly half are willing to wait seven months or more.
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Orders are becoming normal
Some 35% of respondents said they would custom order their next car and wait for it to be built. They expect to wait an average of 10.4 weeks for it to arrive.
Order-and-wait is the usual purchase model in Europe and something more American automakers have been embracing since the microchip crisis began. Ford
has said it may move to an order-only model over time and has sold some popular models, like the Ford Bronco and F-150 Lighting electric pickup, through an order system. Acura recently did the same with its reborn Integra.
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They think prices are never coming down
New car prices may have spiked thanks to the microchip shortage, but many car shoppers believe they won’t come down when the shortage ends. And 57% say prices will “remain higher than before.”
The cynics are on to something. Executives from several major automakers have said they plan to keep car supplies permanently lower than they were pre-chip-shortage. The shortage has taught them that keeping big stocks of cars to sell drives prices down.
The CEO of America’s largest dealership group also recently predicted that heavy discounts would not come back when the shortage ends.
This story originally ran on KBB.com.