SCRANTON, Pa. — The sign outside Matt Burne Honda in Scranton says used cars are "going fast," and it is neither an exaggeration nor a marketing ploy.
"We've never seen anything like this before," Brian Walsh said. "When the pandemic started, we thought there was going to be certain repercussions. Never did we even imagine a situation like this."
It's all because one tiny car part is in short supply: the microchip. Thousands of them are needed for the high-tech features in most modern cars.
"The residual effect is that manufacturers are having a very hard time getting them. It's really slowed down the new car deliveries for us, making it very hard to supply your lot with used cars."
It's an even bigger problem at the smaller used car lots like Prestige One Auto Sales in Peckville.
"Demand is up because there's no new cars to be bought. I mean, looking across the street, there's six cars on the car lot. That's a new car franchise. You know that's an all-time low. I've never seen that in the 20 years I've been doing this," Rich Yencho said. "The little guys are going to struggle because we don't have as many, you know, we don't have the trade-ins, and we don't have the lease turn-ins that come back at a new car store would have, so it's a little tougher for us to find the vehicles and try to be competitive."
Higher demand means higher prices—bad news if you're buying, great news if you're selling.
"It's sort of that domino effect. You can get a lot more for yours. You might pay a little more for the new, because of that supply and demand. But if you have a car right now and you want to sell it, no doubt it's the best time in history," Walsh said.
So, how long is this expected to go on?
"What we've been told is that the demand will start to ease in October, November," Walsh said. "The microchips will be in abundance later this year, but they'll never catch up with supply and demand until mid-next year."