The Expert Podcast

…The supply chain is affecting more than just new car inventory and used car prices It's also affecting the repair industry. Obviously you've seen new car dealerships with empty lots both new and used, and you've seen the prices. On used cars skyrocket. Because people need their car to drive and they can't find a new one So they'll pay over a book value for use one. But it's also showing up. In the repair industry. Repair facilities. Whether at a dealership or standalone repair garages are having difficulty. Getting vehicles back on the road because they can't get the parts. Obviously there's also a labor issue where you can't get good mechanics, but leaving that aside for the moment. You're also going to see where. Parts inventory…is extremely problematic. There's some parts that might. be on two or three or four month backlog Well what do you do if your cars off the road ? During that timeframe. There's an article talking about. drivers waiting months for simple car repairs due to part supply problems…As one example anecdotally in the article it says a person was involved in a minor fender bender. He took her straight to the body shop. The mechanic told him that they have such a backlog They couldn't even look at the car for a month and a half. Luckily the damage was minor The car was still drivable a month later while the car was at the garage the parts finally made it. So this is…a common thing for collision parts for mechanical parts. Even some electronic parts are having difficulty being sourced and the repair shops I've never seen this so bad Here's a 26 year veteran of the parts business a manager at a dealership, family owned repair center. the situation is the worst he's ever seen, and there's no ETA for when the parts will be available As one example, he had a Ford F-150 sitting for four months waiting for a part. People have to find rent-a-cars borrow rides beg borrow and steal. So what does that mean ? If you have a vehicle ? That's your main transportation. Be very careful about operating the vehicle. A minor collision If the car's not drivable can literally take you off the road because that part if it's not available, can't get fixed in a short period of time Like used to be the case. And there may not also be rent-a-cars available as an experiment. Next time you're driving and you go past an auto rental business. Look specifically for enterprise Rent-A-Car because most of the other rental companies are at airports and the other franchises like her. Davis. They normally don't have their vehicles on display They usually have. staged at a back area and they have their. their office in a strip mall but you can't see the cars. Enterprise Rent-A-Car is a little different, most enterprise Rent-A-Car businesses have their vehicles in the front parking lot. Next time you drive by see how many vehicles are there. And look at that on a regular basis What you'll find is they may have a few vehicles in their lot occasionally, but you may drive by some days and have zero vehicles. In inventory. Do a search online to see what vehicles are available for rent You may find that there's no vehicles or they cost 80 90 a hundred dollars a day. Why is this important for you Well, Your transportation is something you count on every day. And many things can take that transportation away It could be a collision It could be. mechanical problem. we have…clients we deal with that have very minor mechanical problems Things like computers not working or even a, had a customer that had a small break problem. And the part wasn't available. This part's problem. Has no ETA according to the article and it might actually get worse Why is that ? Every vehicle that's on the road today or 90% of them. Our internal combustion engine vehicles gasoline or diesel vehicles They have…Fuel you get at the gas station You pump into the car. And it burns and it drives the car…Five or 10 years from now. Vehicles are going to be all electric. You've seen the. Articles and the. The governmental…Environmental support and incentives. That are driving the switch over to electric vehicles. What that's done. It's created. A transition for manufacturers. Most automotive manufacturers you know, for general motors Chrysler. Have taken away all new engineering and development for gasoline vehicles, all their new development is electric vehicles So…the pipeline. Of vehicles that are internal combustion engine is evaporating. They're not making any more. They're not developing any new ones. Certainly they'll still manufacture the current version for a few years. But they're not putting any new money into supply chains or factories for these legacy older vehicles. What that means is the parts are not going to be. In high supply either. Because if you're not building the vehicles for sale through dealerships, you're also not building a lot of extra parts, most parts. For vehicles come as a…overbuild of parts that are manufactured for the actual vehicle. So if you're building let's say Ford F150. You build a million Ford F-150 you might build a hundred thousand. Worth of vehicles extra parts like 10% overage. So you have those parts for people that need them. If you're not going to be building the vehicles, why build the extra parts ? Those a lot of those parts are going to go to waste. So the manufacturers are already starting to pull back on parts production. So you may find that this parts crisis may actually get worse. The…person interviewed in the article was talking about when is it going to get better ? What's the ETA It may never get better. You may find that legacy vehicles on the road right now. Have a parts problem that never gets solved. What does that mean for you ? If you have a vehicle that's. You know more than two or three or four years old maybe five years old. It may be that. It's like Cuba, where these parts these cars just get parked and they never get fixed. You know, in the 1950s. When Cuba was embargoed. No parts could go to that island So the The automotive business was frozen in time Every vehicle on the road was, it's almost like a time machine. There were no new cars and they were scavenged and parts were taken from one car to another. Now it's probably not going to beat that extreme United States, but it may be something where parts become more difficult to get in unlike vehicles from the fifties or sixties or seventies where you can interchange parts There's not a lot of complexity. Parts are now very specialized So vehicles from the two thousands. That part may only fit one car. So if it's not available you may not be able to interchange it from another vehicle. Let us know in the comments what you think about this potential parts crisis and how it's going to affect the usage. Of vehicles in the future that are currently on the road.