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Chip shortage leading to dip in new car sales, but increase in used

Fewer new cars are available. One dealership only had 15 new cars over a recent 90-day period.
Credit: WTOL

TOLEDO, Ohio — The worldwide computer chip shortage is causing major problems for the auto industry. 

Fewer chips are leading to fewer cars rolling off the assembly line and onto dealership lots.

Some plants have even halted production on certain days because of a lack of chips. Ford plants in Detroit and Jeep plants in Toledo halted production for several days in the summer of 2021.

Almost all across the board, U.S. auto sales are down. Meanwhile over at Grogan's Towne Chrysler Jeep Dodge Ram, business is going well. Manager Denny Amrhein says the last few months have actually been some of the best.

Amrhein says Grogan's Towne had only 15 new cars over a recent 90-day period.

The dealership in north Toledo ended up selling over 120 total cars from trade-ins.

"That was because we were selling everything that was coming in that had a chip and people were taking them because they couldn't shop around because nobody had anything," Amrhein said.

The chip shortage has created a strong used car market in which some drivers sell with equity on their loans.

"Used car market's been very very strong. We've taken people out of cars a year and a half on leases, that before you had so much negative you couldn't take them out. Now you take them in on trade they got positive equity."

Amrhein says if there's one thing he's learned, it is that big lots with hundreds of new cars isn't the way dealerships need to make money during the pandemic.

"You don't need to have 500 cars on your lot to sell 150 cars. You can do it with 20 cars."

But with no end in sight for the chip shortage, smaller lots could be the norm for the rest of 2022.

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