New car shopping? Chip shortage and limited supply could mean traveling to a dealership out of state

The economy continues to rebound from the COVID-19 pandemic, but with the ongoing semiconductor chip shortage, many are traveling far and wide just to get the car they desire. It doesn’t matter whether a vehicle is new or used, dealerships are running on empty. 

Nearly 10% of vehicle shoppers traveled out of state to purchase the ride they wanted, according to a new survey by, an online automotive marketplace. Of the 12,000 respondents, 56% bought a new vehicle, while 43% bought a used vehicle.

A shortage of computer chips has caused a number of automotive factories to shut down temporarily in recent months, as they can’t finish building new vehicles without adequate parts. 

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Those issues have contributed to a spike in used-car prices. With newer vehicles harder to come by, used cars are suddenly a hot commodity. 

And that means many people are willing to cross state lines to get what they want.

About 10% of consumers are traveling out of state to find the car they want. (Photo: Damian Dovarganes, AP)

“We’ve seen inventory dive both from a new and used standpoint as the chip shortage really kind of continues to impact the industry,” says Kelsey Mays, assistant managing editor at

Domestic auto inventory has steadily decreased over the course of the year, reaching an all-time low, says Bryce Gill, an economist at First Trust Portfolios, an investment management firm. 

Inventory of new vehicles assembled in North America at the beginning of 2021 totaled 396,500, and has now dropped to 254,800, according to the U.S. Bureau of Economic Analysis.

Big cities like New York, Los Angeles and Chicago will have a larger selection of cars to choose from than rural areas. (Photo: Michael Probst, AP)

“People have a specific car that they want, and their local dealership just doesn’t have it in stock,” Gill says. “That’s why they search and find a place, you know, 200 miles away that has what they’re looking for.”

The distance traveled to get a new vehicle varies, with 51% traveling 25 miles, 20% traveling 50 miles and 13% trekking over 250 miles.

Supply chain issues and labor shortages will continue for the rest of the year and the struggle to keep up with vehicle demand won’t go away overnight. It is like “a bunch of gears turning together,” Mays says. 

Even a drive to another state may not be enough to get precisely what you want.

Car buyers should “be ready to compromise on things like color and specific features and take the best of the options. You may not get everything that you’re looking for,” Gill says. 

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Car shopping across state lines

Here are three tips for anyone thinking about shopping for a car outside of their home state:

  • Trading in your vehicle is going to be your strongest bit of leverage. Maximize your trading value by going to several dealerships and seeing what they will offer.
  • Do your research before hopping on the freeway. While many big cities like New York, Los Angeles and Chicago will have a larger selection, they may be too far of a drive. Checking dealerships online to see current inventory is a great idea to gauge what is closest to you. 
  • Double check how much you will pay in taxes. If you buy in a state with no sales tax, you’ll still have to reregister your car back home and pay taxes. Be sure to see what trading credits the dealership will offer too, as it ties into your sales tax. 

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