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How the Russia-Ukraine crisis is impacting Omaha car dealerships

How it impacts you and your "dream car" delivery
Posted at 7:16 PM, Mar 14, 2022
and last updated 2022-03-14 20:16:28-04

OMAHA, Neb. (KMTV) — Both Russia and Ukraine are big suppliers of gases and materials that are critical in computer chip manufacturing.

Russia produces at least a quarter of the world's supply of palladium, which is found in computer chips. It's a metal not easily found in other countries. That's just one example of how the computer chip industry is facing a scarce supply of materials due to the crisis abroad.

"Car production's already slow because of the COVID-19 pandemic and various issues surrounding that. With the Russia-Ukraine crisis, we're gonna see a lack of more supplies [such as] oil. A lot of electronic components are from the Balkans and that part of the world. So there's going to be fewer parts to make cars, which is going to drag down all production a little bit," Huber Chevrolet Sales Consultant Chris Butts said.

Instead of several hundred cars, there are only a dozen new ones at Huber Chevrolet.

"If there's no new cars to sell, there's fewer cars traded in, which makes fewer used cars available to sell as well. There's just less of everything than there was a year, or even two years ago," Butts said.

It used to take between four and six weeks to get a car delivered, and now Butts warns that's no longer the case.

"We're probably best-case scenario for an ordered vehicle. Eight to 12 weeks for a new vehicle right now," Butts said.

This is all while costs are starting to increase. The dealership received notice this morning that the base prices of full-sized trucks and SUVs will rise, with cost increases effective this week. The costs are between $500 and $1,000.

"This is as bad as I've seen it for the new car supply. A couple of times in the last few months we've gotten down to zero available vehicles," Butts said.

With the Federal Reserve likely to raise interest rates this week, UNL's Assistant Supply Chain Professor Peter Zhu expects this could be a "double whammy" for potential car buyers.

"They have to pay higher sticker price. They have less choice and they have to pay higher monthly payment with higher interest rate. All of this will affect car buyers ... kind of the economy," Zhu said.

Ultimately, both say customers will have to pivot when it comes to finding their "dream car."

"They can just buy a leased car this year. Then immediately will resell for a higher price. This can be something a customer can consider if they don't have enough money to buy, then leasing may be a different option," Zhu said.

"Maybe wait two weeks longer than you used to buy a car. Make sure you buy the right car. Don't rush into anything. That's always the worst way to make a car deal," Butts said.

Zhu believes with higher fuel prices consumers might be encouraged to buy electric cars which could help the environment. Also finding fuel-efficient ways to commute is helpful such as using one car instead of two to save costs.

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