Car shortages in Australia: what are your options?

Car dealers Australia-wide are currently suffering from an almighty conundrum: while there is no shortage of customers who want to buy new cars - many of them gripped by a kind of post-lockdown impulse that means they want a car immediately - there is a shortage of actual new cars to sell them. 

While the wait for a new car could be up to four months pre-pandemic, that period has blown out to about 12 months, and it’s mostly down to one thing: a global shortage of semiconductors, which are essentially the tiny computers that modern cars typically require hundreds of. 

It’s not just a problem that’s affecting Australia: the shortage is having an impact in every market around the globe, across every brand of car, with many manufacturers having to take extreme measures to cope. 

Toyota is one of several companies to have announced production cuts (the Japanese brand will be making 150,000 less cars this year), whereas French car manufacturer Peugeot has resorted to putting analog, rather than digital, speedometers in certain models. 

The main reason for the semiconductor shortage has to do with manufacturers ordering fewer of them at the beginning of the pandemic due to a predicted lack of demand for new cars, and we now know that they were wrong.

Things like COVID-19 lockdowns, shipping delays and port closures have also added to the problem, with Russia’s invasion of Ukraine expected to cause further disruptions to the supply chain, thus dragging the problem out further. 

Surprisingly, car sales have gone up in 2022, despite prices increasing by around 25 per cent for new cars, and up to 50 per cent for used cars, with the total new car sales in February 2022 being 1.6 per cent higher than the same period in 2021.

While some people are happy to wait 12 months for a new car, many are choosing to keep the vehicle that they have, which typically clocks fewer kilometres per week compared to before the pandemic, due to the fact that working from home has become the new normal for a lot of Australians. 

Those hanging on to their vehicles for longer would be wise to purchase an extended car warranty to protect themselves, like the one offered by online warranty specialist Auto Auto (us!).

While most new cars offer a manufacturer’s warranty that typically covers a period from three to 10 years - drivers aren’t covered for things like major mechanical problems once that warranty expires. 

Extended car warranty insurance can protect your vehicle for three additional years, covering the same components of the car and other repair costs that the original manufacturer’s warranty covered (see full PDS), up to the market value of the car, thus insuring you against having to pay large out-of-pocket costs should something go wrong. 

You can get a quote and check your vehicle’s eligibility here. Likewise, if you are looking to purchase a vehicle, you can check the eligibility and take out an extended car warranty for that vehicle when it suits your circumstances.

With new car stock shortages and year-long wait times not changing any time soon, now might be the time to take another look at the vehicle you already have to assess whether it may need an extended car warranty to make sure you’re as protected as possible.