Global chip shortage delays new car production as used car prices soar

Computer chip shortage impacting car sales

A computer chip shortage is slowing down the production of new cars and sending the prices of used cars soaring.

TAMPA, Fla. - If you're in the market for a used car, you've probably noticed the soaring prices, and if you happen to be selling, you know market conditions are strongly in your favor.

Market research company JD Power reported earlier this month that used car prices have hit at an all-time high, with the average price now topping $25,000. As demand surges, auto insiders say the phenomenon is a matter of Economics 101.

Fox News business contributor Gary Kaltbaum said prices are on the rise because car manufacturers can't meet inventory demands due to a shortage in computer chips, meaning more people are on the hunt for used cars.

Steven Cole Smith, a writer for Car & Driver Magazine, said those looking to buy a used car won’t get a bargain.

"If you're looking to sell yeah, it's a sellers' market," he told Kaltbaum.

Smith said there hasn't been a better time for you to try and sell your car, and he has some tips to make sure you get top dollar.

"If you wouldn't buy it the way it is sitting right now, then fix it," he said.

First, it's all about curb appeal. Sellers should take some time making sure their car is enticing to buyers.

"Do the 15-foot walk-up, and if there are any flaws and any possible ways to fix them, do it," Smith said, adding that includes washing it, waxing it, even putting on a show for prospective buyers. "I cover the car, make sure it's clean underneath, certainly gives the impression I've been taking care of it."

The perks of leasing and buying a vehicle

Jeff Rose, a certified financial planner, says deciding to purchase or lease a vehicle isn’t always a financial decision. There are other factors to consider.

Next, it's best to know what everybody else already knows.

"Run a Carfax on your own car," Smith said. "This will give you an idea on what somebody will be able to find out on it."

Additionally, do your own research before pricing your car to sell.

"What I like to do is go to Craigslist... so you get an idea of what they are going for. That, to me, is a more immediate way to find out what the value of your car is," he said. "There's nothing wrong with trading in a car because dealers are actually buying cars right now because they don't have enough used cars at auction."

However, if you're buying a car, you may have to get creative – such as taking your search online and considering shopping remotely. As for the computer chip shortage, industry experts predict the issue could persist until 2022, possibly 2023.

FOX 35 contributed to this report