"What we're seeing right now is a shortage of semi-conductors, specifically the ones that are used in vehicles or vehicle manufacturing and as a result there are fewer cars being built," says Scot Hall, EVP of Operations at Swapalease.com.
These chips control braking, steering, engine management, key function and more. A low supply and a rising demand for new cars is causing an upset in the auto industry.
"Not only are new cars more expensive and harder to obtain because there's fewer of them. People are looking for used cars as well and driving those prices up as a result of less cars being available," says Hail.
This is good news for anyone who has an extra car they've considered selling.
"Dealers are stepping up to the plate and spending more money for used cars. it's a great time to sell a used car if you're a consumer. the caveat I will put on that. If you have to replace it, it's going to be a tough time to replace it at a good value," says Hail.
"Something that people might want to look into is contacting their leasing company and asking about lease extensions. We believe this shortage of microchips will be under control before too long, in the next month or two. and then it will take a little time for production to catch up but if a consumer could extend their lease maybe 2, 3, 4, months, it could put them in a completely different market," says Hail.
As a solution for the shortage, the U.S. Senate proposed the CHIPS for America Act which would provide financial incentives for chip manufacturers to increase their production in the U.S.
Funding for the act may be finalized later this month.