Used car prices soar as buyers splash lockdown savings

Rupert Pontin, director of insight at vehicle data company Cazana, said: “Chip shortages are going to last well into the autumn, while Boris Johnson’s travel restrictions have not just protected the country but also the automotive industry.”

A lack of new cars coming on to the roads is pushing drivers into the secondhand market, creating a shortage of used vehicles with dealers struggling to get their hands on stock to sell, pushing prices up even more.

Another factor is car manufacturers protecting their profits are channeling scarce supplies of computer chips into higher margin, more expensive models. 

Drivers no longer able to afford more expensive new models are instead looking at used cars.

James Baggott, editor-in-chief of Car Dealer magazine, said: “People who can’t stretch their budgets to higher-priced new models are going to the used market but dealers are really battling to find stock to sell.

“For those who are managing to, this could be their best year ever after the nightmare that 2020 was.”

On Friday, Marshall Motor Holdings, one of the UK’s biggest car dealer groups, issued an unscheduled trading update saying it expected record results this year.

It pointed to “positive tailwinds, recent unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles”.

Shares rose 2p to 195p.

Mr Baggott added: “For dealers who have got it right, their results are going to be embarrassing they are so good.”

Katherine E. Ackerman

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