If you’re in the market for a car this year, get ready to pay more.
Car dealerships are reporting they only have a fraction of the vehicles that they typically have, both new and used.
And that limited supply is sending prices to record levels.
In the first quarter of the year, the average new car price was $37,200.
And according to industry analysts at JD Power, that’s up 8.4% from the same period a year ago.
JD Power says wholesale prices for used cars sold at auction are up 26% since the start of this year.
It’s a dramatic shift from a year ago when many car dealerships were forced to close due to the pandemic and a shift to working from home caused a 30% drop in car sales.
[RELATED: Video below explains why car rentals are so expensive right now]
Now sales are booming. Last month, the seasonally adjusted sales rate for new cars hit the highest level since October 2017.
But that demand is coming at a difficult time.
A computer chip shortage is shutting down production at auto plants around the world.
According to Cox Automotive, new car production in North America is down about 3.4 million vehicles in the first three months of 2021.
Limited supply and strong sales, all causing those historic prices.
The computer chip shortage is only one factor squeezing the inventory of available vehicles. Experts say other auto parts, including tires and resins, are starting to be in short supply.