CarGuard Helps Drivers Navigate Chip Shortage

Everybody knows that a chip shortage affects the price and availability of all forms of electronics ranging from kitchen appliances to video gaming consoles. You may not know why this is the case or the reasons behind its outsized impacts on the automobile industry. However, this article will bring you up to speed on everything you need to know about the current chip shortage, including how CarGuard can help you keep your current vehicle in good working order.

What Exactly Is in Short Supply?

When people talk about the automotive chip shortage, they generally refer to semiconductors: an integral component of all modern electronics. You can think of semiconductors like a drawbridge.

If it’s closed, electricity cannot flow from one side to the other at all. If it’s partially open, electricity can flow only if it receives help from a secondary source such as light or heat. If it’s completely open, electricity can flow unabated. Modern devices can need billions of semiconductors per chip, so any shortage will cause problems.

Why Does This Chip Shortage Exist?

The COVID-19 pandemic made it more difficult to manufacture these tiny electricity bridges than ever before, as many factories were forced to halt production. According to The Drive, the logistics of trade also complicate matters. The United States only manufactures approximately 12 percent of semiconductors, despite being one of the biggest markets for the technology. American automakers are therefore at the mercy of international suppliers that may favor their home countries to get the chips they need.

Why Are Automakers Affected More than Other Industries?

The automobile industry is mainly affected by the shortage because there are more stringent governmental regulations in the space than others. For instance, the semiconductors in a Nintendo Switch don’t have to be verified in extreme environmental conditions, but those in a Nissan Altima do. The COVID-19 pandemic also contributed to pent-up demand for vehicles as car-buyers pushed back their purchase decision until the economy became more stable. Now that people are ready to buy cars, there aren’t enough vehicles to buy.

How Is This Affecting Car Manufacturers?

The biggest names are selling fewer cars than they did last year month-over-month. For example, Honda reported that sales in January of 2022 were 19.8% lower than those in January of 2021, even though the global economy was generally healthier. The reason cited was supply chain difficulties tied to the ongoing computer chip shortage. However, automakers are also recording massive profits by maximizing the return on what they can sell, so they aren’t adversely affected in the broad scheme of things.

How Has This Affected Car-Buyers?

Automakers cannot produce the volume of vehicles that consumers expect, meaning that showroom floors are empty throughout the world. As a result, you may not get the selection you would otherwise expect. Furthermore, many dealerships are jacking up the prices on their inventory, forcing consumers to pay more than they’d like to.

Used car prices are currently surging as well, but they are expected to decline when the chip shortage is ultimately resolved. That means that buying a car today could leave you with a car you didn’t want and an upside-down loan in a few years.

How Can a CarGuard Vehicle Protection Plan Help?

If now is not the right time to purchase a new vehicle, it makes sense that you should be doing everything you can to keep your current one running. That means ensuring that your vehicle receives the regular maintenance it needs, following all of the directions included in your vehicle’s owner’s manual, and protecting it from potential hazards such as falling trees during a storm.

If your vehicle is older, you may want to purchase a vehicle protection plan so that you are covered in the event of an incident. CarGuard Administration is a great company to consider because of its customer-first approach. You can select the level of coverage that best fits your needs, whether the all-inclusive Platinum Plus or the basic PowerTrain coverage. You can also rest assured that you will receive outstanding customer service from CarGuard whenever you need to file a claim.

How Do I Choose a Vehicle Protection Plan?

Whether you’re interested in CarGuard or another company, you’ll want to look for several extras that can protect you in this unpredictable climate. For instance, mechanics struggle with the chip shortage just as much as auto manufacturers. If you don’t want to pay a premium to replace electronic vehicle components, enrolling in a CarGuard Prepaid Maintenance or Flat Rate plan is a great way to lock in today’s prices.

Likewise, the chip shortage could make it challenging to locate a rental car if your car needs to stay in the shop for an extended period. Reputable companies such as CarGuard Administration include rental assistance in all their plans, giving you one less thing to worry about.

How Long Will This Chip Shortage Last?

The global shortage of semiconductors is unprecedented in recent history, and potential COVID-19 outbreaks and trade disputes add an extra layer of uncertainty. Unfortunately, nobody knows precisely when the automobile industry will again be operating at full capacity. The prudent move is to be smart with your vehicle, purchase a vehicle protection plan from a reputable company such as CarGuard if you haven’t already, and just wait it out.