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Are We in a Car Price Bubble That’s Soon to POP!?

Posted by: Jesse Kleib on February 22, 2022

Just about anybody who has taken a look at the car market over the past year or two has probably noticed that it’s pretty insane out there. If you want to get your hands on just about any car or truck, it’s going to be a bit of a challenge. Finding one at all might take some work and finding one at MSRP can even feel almost impossible as prices have skyrocketed and new supply is pretty nonexistent.

At this point, I think most of us have become familiar with the chip shortage that has created a lot of problems with all sorts of electronics, most relevantly those that are found in vehicles. For those who haven’t, as a result of COVID complications, computer chips are in high demand and the supply has not been able to keep up as challenges have arisen with the pandemic. As such, anything that has a computer chip in it from an actual computer all the way to heated seats in your car is going to take longer to make if it can be produced at all.

Combine that with rising demand and the logistical nightmare that’s happening right now with getting things shipped around the world and you have yourself quite a bottleneck that has been providing severe shortages in the industry that don’t seem to have an end in sight.

However, where there is are incredibly high prices and low supply, many ask if there’s a bubble on the horizon. At the end of the day, these insane prices and lack of supply couldn’t go on forever… Could they?

Down in the video below, Doug DeMuro talks a little bit about what he expects to happen in the coming months and if he thinks that the automotive situation is a bubble or if we will continue to see these insane prices.

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