Chip shortage likely to keep car prices sky-high through 2023

Back in the spring, a shortage of computer chips that had sent auto prices soaring appeared to be finally easing. Some relief for consumers seemed to be in sight. But that hope is now fading, as a surge in COVID-19 cases from the Delta variant in several Asian countries is worsening the supply shortage, further delaying a return to normal auto production and keeping the supply of vehicles artificially low.

That means record-high consumer prices for vehicles — new and used, as well as rental cars — will likely extend into next year and might not return to earth until 2023, according to analysts. In July, new-car prices hit a new record for the fourth straight month, according to Kelley Blue Book. The average transaction, at $42,736, was 8% higher than one year ago, with a typical new car costing above the manufacturer's suggested retail price.