Strong demand and sparse supply are forcing new and used vehicle prices up in Nanaimo and abroad. (Alex Rawnsley/NanaimoNewsNOW)

By Ian Holmes

price hike

Historically low inventory strains local vehicle-buying market

Mar 11, 2022 | 6:24 AM

NANAIMO – Multiple factors are hand-cuffing widespread new and used vehicle shortages, leaving many lots in the region uncharacteristically bare.

Pent-up demand and supply-chain issues are impacting availability of new and used vehicles, forcing prices up, according to Zachary Smith, director of operations of Nissan of Nanaimo.

He said the new car buying market across North America and elsewhere is severely impacted by a semiconductor chip shortage, a critical component for entertainment screens on new vehicles. The end result is higher prices and frustrated buyers.

“It’s a very different market than it was years ago, there’s no more rebates, there’s no more low rates on these cars,” Smith told NanaimoNewsNOW. “The manufacturers aren’t really inclined to try and entice consumers because availability is the only enticement they need.”

Smith said wait lists lasting several months are commonplace at most dealerships.

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“For some brands the wait can be as long as two years.”

As supply remains scarce for new vehicles, used cars are also hotly contested. Smith said their dealership has shifted to buying used vehicles in order to keep options on the lot.

In some cases used vehicles are being re-sold for substantially more than what they were bought for. He said buyers should proceed carefully if they’re in the market.

“Buying a new vehicle right now at pretty close to what they’ve always been listed for is a pretty smart thing to do, because half the time right now you can turn around and sell that new car for more than you bought it for six months later.”

Fewer options are available on local car lots due to a number of supply issues and part shortages. (Alex Rawnsley/NanaimoNewsNOW)

Surging gas prices are also impacting the market with more people looking for hybrid or electric vehicles, however Smith said frustrated buyers often can’t get what they want in a timely fashion.

Ross Barnard, sales manager of Laird Wheaton GM in Nanaimo, has been involved in the business for more than 30 years.

“I have never seen inventory levels that have been effected like this before,” he told NanaimoNewsNOW.

On top of the chip shortage challenge, Barnard said factory closures at various points of the pandemic and transportation hiccups to get new vehicles to lots are also causing havoc.

“I have six vehicles on the ground that are brand new to sell, normally I would have 200,” Barnard said, who noted their used vehicle stock is half of what it usually is.

Barnard doesn’t foresee the situation improving until the third quarter of this year.

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ian@nanaimonewsnow.com

On Twitter: @reporterholmes