Supply chain issues mean buying a car sometimes takes a plane ride

The disruption of auto production has spread throughout the automotive world. For a while in the spring and summer of 2020, car rental companies stopped buying new cars and sold many of their vehicles to survive when travel was restricted. Today, these companies are looking to take advantage of a booming rental market and are scrambling to buy cars, often in competition with consumers and dealers.

The big discounts and incentives that were once standard features of buying cars in the United States have all but disappeared. Instead, some dealers are now adding an additional $ 2,000 or $ 3,000 to the list price of new cars. This has left car buyers furious, but the dealers who raise the prices know that if one customer balks, another usually waits and is ready.

In November, the average price for a new car was a record $ 45,872, down from $ 39,984 a year ago, according to Edmunds, an auto data provider. The average price paid for a used car is now over $ 29,000, down from $ 22,679 in 2020, and Edmunds expects it to exceed $ 30,000 next year for the very first time.

With the rise in used car prices, some consumers are spending to repair older vehicles and keep them longer. More and more cars damaged in accidents are being repaired instead of being declared a total loss by insurers and sent to be scrapped.

“The math has changed for whether a car is totaled,” said Peter DeLongchamps, senior vice president of Group 1 Automotive, a Houston-based auto retailer that operates its own chain of body shops. “Our parts and service business is very good. We are seeing more and more cars being repaired based on high usage values. “