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Shortage of car electronic chips requires shift in plans for car sellers, buyers

SANTA BARBARA, Calif. - If you were planning to buy a new car before the end of the year, your dream vehicle may be built and nearly ready, but the electronic chip to make it work is delayed.

There's been a backlog for several reasons and buyers are on the sidelines waiting for many dealers to get their vehicles road-ready.

"Inventories are light right now so finding exactly what you want sometimes, it's a little harder than it used to be, say six months or a year ago," said Lexus of Santa Barbara Sales Manager James Porter. "Business is still happening,  it  just that you may not find exactly what you want  but we will figure it out with you."

It's linked to the global semiconductor shortage, the backed-up number of cargo ships off Southern California and issues with the trucking industry.

Some industry analysts are predicting a shortfall of eight million vehicles by the end of the year.

Car dealers have a leaner selection on the lots and test drives might be just leading to a pre-order when the right car, with the right features, is ready.

Advice from dealers is to place your order now and expect to wait possibly at least six months.

"We want people to come down and see these cars in person. We usually have one of everything and then depending on what their wants and needs are, we assess that accordingly and then find the perfect vehicle for them," said Porter.

He says customers who are flexible may get their vehicles quicker. "Maybe they wanted, their three top colors were a white, a silver, and a black and we couldn't get them the white so they got the silver, and they are still super excited about that"

Some car buyers are purchasing what is available instead of what they were looking for. Some are ordering and waiting. Some are just fixing up their current car and driving it more miles.

Recent used cars with low miles have also been a popular option, but that inventory is shrinking too, not because of electronic component issues but the increasing demand.

Many car dealers on the Central Coast are clearly offering fewer vehicles than what would normally be showing out front or in the display rooms. It's very noticeable in Santa Barbara's main hub of car dealers on Hope Ave. and Hitchcock Way along Highway 101.

Porter says 60 percent of the sales now are with customers who have a custom vehicle in mind. They work out the color, features and price before they see their vehicle. "It is exactly what they wanted to pay for the car, it's exactly the car, it is exactly the color combination  the wheels,  the everything it's everything they want," said Porter.

Pricing is also challenging due to the supply and demand equation changing.

One thing Porter and no doubt other sales managers are saying is, "they know it is not our fault.    They are putting their trust in our hands."

He also says car buyers going to a larger market do not get the support after the sale that they get locally.

For used car owners trying to sell, analysts say this is a time to get a few more dollars than you originally asked for your wheels.


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John Palminteri

John Palminteri is senior reporter for KEYT NewsChannel 3. To learn more about John, click here.

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