Key Shortages That Will Make Your Memorial Day More Expensive

A new or used car

If you wanted to buy a car for that summer road trip you’ve been planning since March 2020, you may find yourself up against some fierce competition — and ever-increasing prices.

New cars are in short supply due to an ongoing shortage of the computer chips that power everything from the

Bluetooth
in cars to iPads, and their scarcity has been felt all over the economy. Some car manufacturers had to halt production at the start of the year, leading to more elusive models and higher prices.

That’s trickled down into the used-car market. In April, used car prices jumped by 10%. Insider’s Ben Winck reported that that was the largest one-month increase since 1953, when data first started to get collected. In fact, that price jump accounted for around a third of April’s big 0.8% jump in inflation from the previous month.

Experts attribute the shortage to demand for vehicles, especially as new cars are harder to come by, and rental car services attempting to rebuild fleets; many sold off some of their cars at the onset of the pandemic. 

Rental cars are also in high demand. As Americans clamor to travel again, there’s a “perfect storm” brewing, Insider’s Brittany Chang reports.

In hot tourist destinations, prices are surging; Jonathan Weinberg, the founder and CEO of AutoSlash, told Chang that some rental cars in Hawaii are going for over $500 a day — a massive increase from the usual $50. And rental car companies are expecting strong demand over the summer for their reduced fleets, all while coming up against the computer chip shortage.

But vacation goers might still find it expensive and difficult to get around if they’re counting on rideshare drivers. Uber and Lyft have been trying to lure drivers back to work with new incentives, but there’s still a persistent driver shortage. That’s due to a variety of factors, as drivers worry about safety and find stability in enhanced stimulus benefits.