After a year of record prices and fewer choices, the new car market is far from pumping the brakes in 2022.
Not only are dealerships facing record-low inventory, but their customers are waiting six to nine months to get behind the wheel of their pricey new ride.
"They have no choice. They have to wait," Lexus of Route 10 owner Tomas Maoli told FOX Business’ Lydia Hu Thursday. "Most of the cars that we sell are not even delivered to the dealership yet."
The average transaction price of new vehicles was expected to hit a record high in December, according to J.D. Power, of $45,743, the first time ever above $45,000 and 20% higher than the previous year.
"They're paying anywhere from 5 to $10,000 over MSRP because they need a vehicle," Maoli explained. "It's part of their lifestyle, right? And they need it, and so they're paying for it."
New car dealers have barely one-third of the normal number of car units – around 2 to 2.5 million, JD Power data shows.
Orders for chips were canceled when automakers temporarily shut down factories at the height of the pandemic. In addition, the demand for chips increased at the same time in other industries because people were staying at home and needed additional electronics for work and play.
The surge of microchip demand started when automakers restarted production, leaving chip manufacturers unable to keep up.
Maoli said he believes car prices won’t slow down until 2023. This comes as Biden is accusing Republicans of wanting people to be too poor to afford cars.
The president’s proposal to fix the problem is to "increase the supply of cars by making more of them," but global supply chain backlogs continue to drag chip and auto production.
The Associated Press contributed to this report.