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SIOUX CITY, Iowa (KCAU) – Many car dealerships across the country and here in Siouxland are experiencing a car shortage. As a result, used car prices have soared.

According to Kelly Blue Book, the average price for a used car hit an all-time high last month at around $23,000. This is concerning for some people who are looking for their next upgrade.

“A few weeks ago, I looked at a used car, and what they were going to give me for my car and what they wanted for that car, I’m still driving my car,” said Doug Freeman.

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Freeman wanted to get a used car but said the current sticker price of a used car is shocking and higher than he’s ever seen.

“I think pricing is a big issue. My daughter just bought a used one, and when she told me what she paid for it, I was surprised. You’re talking five, ten thousand dollar differences.”

Ben Knoepfler is part owner of Knoepfler Chevrolet. He said low production by manufacturers isn’t influencing the current demand for cars.

“Ultimately, the factor is supply and demand. That’s what we deal with in any sort of market and certainly now, the demand has sort of outstripped the supply. However, that’s changing and we’re coming back into more of a normal situation and it has to do with the chips coming back,” said Knoepfler.

A microchip shortage is impacting the price of both used and new car sales, and the demand actually goes much further.

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“It’s not just unique to the automotive industry, so we have a lot of people competing for this little microprocessor. As a result, they’re making as many as they can and pushing them out, but we can’t completely build a car to do what it’s intended to do until that tiny little chip is put in there,” said Knoepfler.

Knoepfler expects car prices to go down when microchips again hit the market around the end of this year.