Used car prices skyrocket to all-time high
Post-lockdown demand and semiconductor shortage both contribute to used car prices hitting an unprecedented level
Used car prices have shot up to an unprecedented level, with drivers paying more on average than ever before to secure a second-hand motor.
Pent-up demand from the months in which dealers were closed under Covid-19 lockdown restrictions has been released, with drivers rushing to buy used cars in the same way they did when the first national lockdown ended in summer 2020.
The key difference this time around, though, is the global semiconductor shortage. This has resulted in a smaller supply of new cars, meaning a higher proportion of those wanting to replace their existing car are heading to the used market. This, in turn, has led to supply and demand issues.
BuyaCar.co.uk - an online motor retailer and sister title to Auto Express - has seen the average price of a used car sold on its platform rise from £13,108 in January to an all-time high of £15,399 in May. Also, the average price of its top five best-selling cars broke the £17,000 barrier for the first time.
Peter Gibney, head of commercial operations at BuyaCar, told us the post-lockdown inflated prices only lasted a couple of months in 2020, but are expected to last for much longer this time around.
“Since forecourts opened on 12 April… dealers have been overrun with people,” he said. “In the build-up to that, speaking to dealers, they said they were booked for test drives for weeks at a time.
“It does seem to be persisting and it’s not just necessarily that the demand is high - it’s just that the supply is so low.”
BuyaCar’s data shows that these inflated prices haven’t put buyers off, with a continuing trend of customers going for more expensive, better equipped models. Gibney suggests this may be due to people having more money to spare as a result of lockdown keeping them at home and cutting commuting costs. He also pointed out that the situation has resulted in greater part-exchange offers for buyers.
One of BuyaCar’s most popular models, the Mercedes A-Class, has gone from an average sale price on the platform of £14,998.04 in January 2021 to £17,371.00 in May 2021. Further statistics from valuation service provider cap hpi shows similar trends for other models.