The Expert Podcast

The supply chain is affecting more than just new car inventory and used car prices; it's also impacting the repair industry. You've probably seen new car dealerships with empty lots, both new and used, and you've noticed the prices of used cars skyrocket. People need a car to drive, but when they can't find a new one, they'll pay over book value for a used one. But this issue is also affecting the repair industry. Repair facilities, whether at a dealership or standalone repair garage, are having difficulty getting vehicles back on the road because they can't get the parts.

There's also a labor issue where good mechanics are hard to find, but putting that aside for now, parts inventory is extremely problematic. Some parts are facing backlogs of two, three, or even four months. What do you do if your car is off the road for that long? One article talks about drivers waiting months for simple car repairs due to parts supply problems. As one example, a person involved in a minor fender bender took their car straight to the body shop. The mechanic told them there was such a backlog that they couldn't even look at the car for a month and a half. Luckily, the damage was minor, and the car was still drivable. A month later, while the car was at the garage, the parts finally arrived. This is a common issue for collision parts, mechanical parts, and even some electronic parts that are hard to source. Repair shops have never seen a situation like this before.

A 26-year veteran of the parts business, who works as a manager at a family-owned dealership repair center, said the current situation is the worst he's ever seen. He mentioned that there's no ETA for when parts will be available. For example, he had a Ford F-150 sitting for four months waiting for a part. People are having to find rent-a-cars, borrow rides, and do whatever they can to get by. So, what does this mean for you? If you rely on a vehicle for your main transportation, be very careful about operating it. A minor collision that makes the car not drivable can literally take you off the road because the necessary part might not be available, and repairs could take much longer than usual.

You may also find that there are no rental cars available, or they cost significantly more. As an experiment, next time you're driving, look for an Enterprise Rent-A-Car location. Unlike other rental companies, Enterprise usually displays their vehicles in front of their locations, so you can see their inventory. When you drive by, take note of how many vehicles are in the lot. Some days, you may find they have very few, or even none. If you search online, you might find that rental cars are unavailable, or if they are, they cost $80, $90, or even $100 per day. This highlights the importance of transportation—many things can take your vehicle away, whether it’s a collision or a mechanical problem.

We've had clients who dealt with very minor mechanical issues, like non-working computers or even small brake problems, and couldn’t get parts because they weren't available. The article mentions that this parts problem has no ETA, and it might actually get worse. Why is that? Most vehicles on the road today, or 90% of them, are internal combustion engine vehicles (gasoline or diesel vehicles). They run on fuel you get at the gas station, burn it, and drive the car. However, in five or ten years, most vehicles are expected to be electric. The push for electric vehicles, backed by governmental environmental support and incentives, has created a transition for manufacturers.

Most automotive manufacturers, like General Motors and Chrysler, have stopped all new engineering and development for gasoline vehicles. Their new development is focused on electric vehicles. This means the pipeline for internal combustion engine vehicles is evaporating. While they will continue to manufacture existing versions of these vehicles for a few years, they are no longer investing in new supply chains or factories for these older vehicles.

As a result, the parts for these vehicles may not be in high supply. When you manufacture vehicles, you typically produce extra parts—about 10% more than needed. If you're no longer building the vehicles, you're also not building the extra parts. Many of these extra parts will go to waste. Manufacturers are already starting to reduce parts production, so the parts crisis may get worse. One of the people interviewed in the article said that when asked about an ETA for parts availability, the response was that it might never get better. Legacy vehicles on the road right now could face a parts problem that never gets solved.

So, what does this mean for you? If your vehicle is more than two, three, or even four years old, it may end up like cars in Cuba, where the cars get parked and never get fixed. Back in the 1950s, when Cuba was under embargo, no parts could get to the island, and the automotive business froze in time. There were no new cars, and people scavenged parts from different vehicles to keep them running. While the situation in the U.S. may not be as extreme, it could become more difficult to get parts.

Unlike older cars from the 50s, 60s, or 70s, where you could interchange parts, today’s cars have more specialized parts. For vehicles from the 2000s, one part may only fit one specific vehicle, so if that part is unavailable, you may not be able to find it anywhere else. Let us know in the comments what you think about this potential parts crisis and how it will affect the future use of vehicles currently on the road.