Could Japan disaster cause spike in used cars and parts prices? - KAIT Jonesboro, AR - Region 8 News, weather, sports

Could Japan disaster cause spike in used cars and parts prices?

By Amanda Hanson - bio | email feedback

JONESBORO, AR (KAIT) - The Japan earthquake and tsunami is shaking up the U.S. automotive industry. The affects of the natural disaster last month halted production for many Japan car manufactures. In the next few weeks, dealerships expect to see shortages in parts manufactured in Japan and are already seeing a hike in used car prices. But, what does that mean for you, the buyer?

"We've had to get a little more creative on how we get some of these cars," said Mike Stevenson, the General Manager at Car Choice, a dealership that specializes in pre-owned vehicles.

"We're having to spend more on transportation now to go get cars further out just to get a good, fair price," said Stevenson.

According to a report from USA Today, The National Automobile Dealers Association pricing service has seen an 11% increase in wholesale prices for many of the popular used compact cars within the last couple of weeks.

Stevenson says in efforts to maintain inventory, they've already teamed up with autotrader.com.

"We're trying to actively buy customers vehicles, because a lot of times people are trading them for new cars. We actually can give them a little bit more because we specialize in the pre-owned market," said Stevenson.

But it's not just used cars. Tony Fowler, who is the Service Manager at the Central Toyota Dealership, says there are currently 125 different part numbers that will only to be distributed by manual request. "It helps keep them spread out between the dealers. It's to ensure that no one dealer gets too many, knowing that those parts could be hard to get if they are scarce later on," said Fowler.

A study done by IHS Automotive predicted the parts shortage could reduce auto production around the world by about thirty-percent. "You'll slow down an entire assembly line for just one part or stop it completely. So re-routing where these parts are going to be made, and figuring out how to get those production lines back open is their main concern," said Fowler.

While Fowler says they haven't noticed a scarcity of auto parts yet, the biggest unknown is the future availability.

"We're still looking at later on this summer before we will start seeing shortages in vehicles and parts in the area. I think the vehicles will be more of a concern at this point," said Fowler.

Fowler says he does not expect the cost of repairs to increase. Mike Stevenson on the other hand says if your car is having problems, he suggests getting it checked out now rather than later.

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