It happened with toilet paper, it happened with gasoline, and now it’s happened with cars: Consumers heard about a looming shortage and then proceeded to clean merchants out.
A chart of spending on motor vehicles and parts shows that in March and April, Americans ramped up their purchases of new and used vehicles to record levels, even as they spent less on other products in favor of services instead.
News of a computer chip shortage forcing carmakers to cut production reached car-shoppers who were planning to buy over the summer, and some decided to pull the trigger early, said Charles Chesbrough, senior economist at Cox Automotive, an automotive data company. This, combined with stimulus checks bolstering consumers’ wallets, boosted demand and made April one of the best months ever for auto sales, Chesbrough said.
Prices have also been increasing, especially for used cars, reaching a record average of $23,444 for used vehicles as of May 10, according to data from Cox. Both the increasing prices and brisk sales contributed to the spike in spending.
“It’s a really crazy environment out there,” Chesbrough said.
But the stellar sales numbers aren’t likely to last—thanks to that chip shortage, dealers are going to have a hard time restocking from the spring shopping spree. Inventories are severely depleted and that’s probably going to hurt sales in May, Chesbrough said.