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How the Nationwide Chip Shortage is Affecting Car Availability

How the Nationwide Chip Shortage is Affecting Car Availability Blog Header

By Madeline Klein on June 25, 2021 in Say's Spotlight

If you’re an avid news reader or a big car junkie, you’ve probably already heard lots about the nationwide chip shortage that’s running rampant in the car industry. We’ll cover what’s happening and how it might affect your summer road trips.

What’s the chip shortage?

The chip shortage is taking several industries by storm, not just the car industry. By the way, when we’re talking about “chips” here, we aren’t talking about potato chips or poker chips. We’re talking about semiconductor chips which are fancy chips that help run electronics, including the electronics in your car!

Let’s go back to last year (we promise this is only for a moment) when the Coronavirus first hit. Factories were forced to close for safety, delaying production of many items (*cough* toilet paper *cough*) and growing a significant backlog of orders. In addition to this, the rapid change to a work-from-home culture required many people to buy computers. This caused a particular strain on chip production.

USA Today explains why the auto industry in particular is being hit so hard:

“Stay-at-home orders drove a surge in consumer electronics sales squeezing auto parts suppliers who use chips for computers that control gas pedals, transmissions and touch screens. Chipmakers compounded the pressure by rejiggering factory lines to better serve the consumer electronics market, which generates far more revenue for them than autos.

After eight weeks of pandemic-induced shutdown in the spring, automakers started reopening factories earlier than they had envisioned. But then they were hit with unexpected news: chipmakers weren’t able to flip a switch quickly and make the types of processors needed for cars.”

As a result, automakers have pivoted to using the small amount of available chips in higher selling, more expensive vehicles like SUVs and trucks.

How will the chip shortage affect buying or renting a car?

First, if you were planning to buy a new car just in time for summer, plan to pay a pretty penny or possibly reschedule your purchase. The Verge reports, “about 13 percent of people who bought a new car in the US in April paid above sticker price.”

So why not rent? At the beginning of 2020, travel plummeted due to stay-at-home orders, and car rental companies were forced to sell part of their fleets to save money. Now, with so many people choosing the rental option, rental car companies are having trouble with availability. According to Business Insider, “The massive rental-car shortage is causing vehicle rental companies to turn to car auctions in order to regrow fleet sizes”. Demand is now incredibly high for renting vehicles, yet nobody has vehicles to sell. This is quite the pickle we’ve all found ourselves in!

What does this mean for your summer road trips?

While this might throw a wrench in your summer plans, don’t cancel anything yet! Take this information and use it to fuel your inner planner. If you opt to take your own vehicle on the adventure, call your local dealership to get it serviced. If you were planning to grab a rental car for your cross-country adventure, book it early! Appointments and rentals are both hard to come by in some areas, so planning WAY in advance is key!

Either way, don’t miss out on summer plans and be sure to share your adventure with us on Facebook or Instagram with #sayadventures!

Car insurance you can count on.


Madeline Klein is Say's Digital Content Producer. She graduated from the University of Missouri with a Bachelor of Journalism, emphasis in Strategic Communication. Her experience is in writing and digital media. Madeline loves using her creativity to write and design new and exciting pieces of work for Say!

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