Dealers 'might find it difficult to keep the doors open' due to rising car prices and low inventory

The competition between car manufacturers and other chip users is getting stiffer, which has significantly affected car prices.

The previously perceived "short-term" automotive semiconductor chip shortage problem is predicted to continue affecting car manufacturing, dealership inventories and the affordability of vehicle costs. Prices of both new and used vehicles continue to rise because dealerships have no option but to add more to the sticker price.

"Dealers really don't have a choice with supplies so low,” New York City Honda and Acura dealer Brian Benstock told Automotive News. “Without the additional markups, they might find it difficult to keep the doors open.”

Cox Automotive noted that average new-vehicle prices have reached $42,000 and the average used-vehicle prices are as high as $25,000. Additionally, the U.S. Labor Department saw that used car prices have increased by 45% over the last 12 months.

Semiconductor chip shortages are forcing dealerships to keep a reduced inventory of vehicles on hand.

The chip shortage is not only a cause for concern for dealerships but also for the federal government. The scarcity of the material drives all vehicle prices to a luxury-car level, igniting inflation fears at the White House. While the federal government has been making efforts to help resolve the low supply of chips, a White House official noted that there is too much uncertainty as to when prices will return to their normal levels, according to Automotive News.