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Sticker Shock: Chip Shortage Causing New & Used Car Prices To Skyrocket

MIAMI (CBSMiami) – If you're shopping for a car, be prepared for sticker shock as prices are at record levels.

The average cost of a new car has now topped $40,000 and used cars are up nearly 30% in the last year.

When Nina Anziska went shopping recently for a new car, there were few options and no deals.

"I probably am spending probably closer to $100 more a month than I wanted to," she said.

She was hoping to lease the same model Volkswagen Jetta that her brother got 9-months ago for $250 a month. She was quoted $315 – a 26% jump.

"It's absolutely nuts right now if you want to buy a new car," said Ed Kim, an automotive industry expert.

Kim said a computer chip shortage is to blame for the low supply of new cars.

"I would say you're pretty lucky if you're just paying MSRP," he said.

During the pandemic, U.S. automakers temporarily closed factories and canceled orders for computer chips amid plunging sales.

So chipmakers focused instead on smaller chips for electronics like refrigerators, TVs, phones and laptops, which are all in high demand now.

"Once you adapt your supply chain to something else, it takes a while to go back. I struggle to see things going back to what they were for another, I would say, six or nine months," said Carolina Milanesi, president of Creative Strategies.

In the meantime, some automakers are storing unfinished vehicles.

Ford said it's putting the brakes on production in some factories this summer. The company anticipates producing more than a million fewer vehicles this year.

And many are now turning to used vehicles, driving prices up 30% in May with some models reselling for more than they did when they were new.

"If at all possible, wait," said Kim. "Because the supply is so low, you know, people are having a very hard time finding the exact configurations they want. You may need to be a little bit more flexible on those things."

If you've got a used car to sell, now is an excellent time to do it, as long as you don't have to buy another one to replace it.

And if you must buy now, experts say the best prices are on sedans because they're less popular.


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