Used car prices have soared to record levels, according to reports coming from second-hand vehicle market insiders.
Buyers growing increasingly frustrated with long waiting times and delivery delays for new models – as a direct cause of the shortage in semiconductor computer chips that has even seen some manufacturers down tools at factories – have instead turned their attention to used cars.
This in turn has pushed the values of second-hand models significantly higher, with Heycar claiming the average price of Volkswagens on its website has increased by 8 per cent in a month.
Used cars at ‘record high prices’: Semiconductor computer chip shortage is causing massive disruptions for vehicle production
Online used car marketplace BuyaCar said it has seen values ‘shoot up to an unprecedented level’ it calls ‘new record prices’ in recent weeks with evidence of drivers paying more on average than ever before to secure a second-hand motor.
It says the pent-up demand from the months of forced closures earlier this year has had a part to play in pushing values higher, though says the global semiconductor shortage that is causing huge delays for new model deliveries is having a more significant impact.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, has described the computer chip issue as ‘massively challenging’ for the industry, especially in the wake of its worst year in decades for both registrations and home production as a result of the pandemic.
Jaguar Land Rover and Mini are among the UK manufacturers who have had to pause assembly lines while they wait for the flow of semiconductors to return, with JLR’s Nitra plant in Slovakia putting on hold production of the new Defender 4X4 due to the parts supply shortage.
Reports suggest customers placing orders for the Defender today will be waiting for up to a year for their hulking off-roaders to arrive.
BMW, Daimler, Ford, General Motors and VW Group are among brands that have had to either reduce or hit hold on outputs while they wait for chips to arrive at vehicle plants, causing a knock-on effect for delivery disruptions.
Computer chip supply issues for new models has resulted in delivery waiting times of up to a year for the most in-demand cars
This increasingly strangled supply of new cars has seen the average price of a used models sold on BuyaCar rise from £13,108 in January to an all-time high of £15,399 in May, it said.
It also claims that the average price of its top five best-selling cars broke the £17,000 barrier for the first time since the website launched in 2002.
Having conducted a recent poll of in-market buyers, it found that many popular new models are currently taking between three and five months from order to delivery – and are likely to extend even further as supplies continue to wane.
It says this has caused ‘a perfect storm’ for second-hand values, warning that the upward trend for used values shows no signs of slowing while chip shortages pursue – warning that those hoping to change their car in the short to medium term ‘may be unwise to wait for prices to settle’.
|Manufacturer||Average stock price in April||Average stock price in May||Percentage increase|
Online automotive marketplace Heycar says it has seen the average price of a used VW rise by 8% in just one month as more drivers turn to the second-hand market
Heycar is painting a similar picture based on the values of second-hand cars listed on its website.
Since dealers reopened in April, it says the price of used models have jumped significantly.
Data from car marketplace shows that average prices from the German manufacturer rose by 8 per cent in May – leaping from £19,718 to £21,296.
SEATs have seen a similar hike with a 7 per cent surge pushing the average stock price increase from £15,217 to £16,241 in a month.
That’s followed by a 6 per cent rise in value for Mercedes-Benz vehicles – up from £27,770 to £29,509.
A 2020 example of a Ford Fiesta – the nation’s most-bought new and used car for over a decade – has gone up in value by £628 in a month, according to Heycar
Buyers might be dodging diesels on the new car market but a used Dacia Sandero with an oil-burning engine under the bonnet has risen £737 in value on average in just one month due to demand, according to the online marketplace
This has resulted in significant price changes for some of the UK’s favourite used cars, the website reports.
A snapshot of average stock values shows the average price of the 2017 Golf 1.0 TSI petrol increased by 7 per cent, while 1.5 diesel versions of the Dacia Sandero jumped by 13 per cent.
At the same time the UK’s best-selling car – the Ford Fiesta has also been increasing in value – by 5 per cent from £13,475 to £14,103.
Dan Powell, senior editor at Heycar said: ‘We’re currently facing the almost unprecedented situation where, for many of us, used car values are actually on the rise.’
He adds that this is very good news if you’re looking to sell, and it could provide a boost in part-exchange values for those willing to wait on extended delivery times to get their hands on a new motor once the semiconductor shortage clears.
|Manufacturer||Model||Average value in April||Average value in May||£ increase||% increase|
|Mercedes-Benz||A-Class A160 AMG Li (2017)||£14,737||£15,868||£1,131||7.7%|
|SEAT||Ateca 1.5 TSi EVO S (2019)||£17,251||£18,350||£1,099||6.4%|
|Volkswagen||Golf 1.0 TSI 110 SE 5dr (2017)||£11,956||£12,791||£835||7.0%|
|Dacia||Sandero 1.5 dCi Laureate 5dr (2017)||£5,850||£6,587||£737||12.6%|
|Ford||Fiesta 1.0 EcoBoost 125 Titanium X 5dr (2020)||£13,475||£14,103||£628||4.7%|
|Nissan||Qashqai 1.2 DiG-T Acenta 5dr (2018)||£10,901||£11,426||£525||4.8%|
Also commenting on the impact of the semiconductor shortage on second-hand motor values, Jim Holder from What Car? added: ‘Our own research of 1,149 in-market used buyers found 29 per cent were originally in the new car market, but have switched to the used market in search for lower prices and better stock availability.
‘The ongoing shortage has the potential to match Covid-19 for its disruption and intensity, as there is no quick or easy fix in sight and highlights the weaknesses of even the most robust global supply chains.’
Richard Peberdy, UK head of automotive at KPMG UK, explained the reason behind the supply shortage issues felt by auto makers.
‘Global inflationary pressures affecting materials like copper, steel and oil are adding to the well reported issues surrounding semiconductor supply, which continue to clip UK automotive output,’ he told This is Money.
‘And while the Covid-19 picture is improving, new outbreaks have forced some port shutdowns in China, creating new blockages in the global supply chain.
‘Inventories have fallen to very low levels as production remains stifled and demand recovers.’
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