A dearth of highly desirable new vehicles combined with rising prices is driving some new vehicle shoppers to the sidelines, at least until the market gets back to normal.
Potential buyers are facing a difficult market these days as the most popular new vehicles, mainly trucks and crossovers, are in short supply due to the semiconductor shortage. Compounding the problem is the good ol’ laws of supply and demand — the more someone wants something, the more it’s going to cost.
Average transaction prices for new vehicles have been steadily rising, surpassing the $42,000 mark in July, according to Cox Automotive, which set another new record. Other analysts are seeing similar numbers as well.
Some buyers have been waiting for their vehicle to come in, but the waiting game is a long one with no assurances the vehicle they want will arrive within the timeframe the automaker initially projected.
Consumers rethinking plans
“The latest Kelley Blue Book research indicates that most consumers anticipate negative impacts on the automotive market due to the chip shortage, from increased prices to inventory shortages and longer delivery times,” said Vanessa Ton, senior industry intelligence manager for Kelley Blue Book.
“With a large portion of the in-market population now saying they plan to delay their purchase given the current market conditions, it will be interesting to see how that could impact the ongoing delicate balance of supply, demand and pricing across the industry. Long term, OEMs are likely experimenting with made-to-order deliveries for consumers.”
While the long-term process may change, consumers are being forced to make decisions now. Often people will take the path of least resistance and KBB’s survey suggests that’s occurring more than anything else. The research shows 48% of potential buyers who were looking for a new vehicle are likely to postpone their purchase for a few months.
Of those likely to postpone, most plan to wait at least several months: 40% said seven months or longer, 40% said three-to-six months, and 12% said one-to-two months. For buyers who are not willing to wait, there is a realization they may need to make some changes in order to get a new vehicle sometime soon.
Of those, 25% said they would consider switching brands, 19% said they would consider changing vehicle categories, and 18% said they would consider shifting from purchasing new to used.