Semiconductor shortage affecting car sales
Second hand cars continue to be in high demand as the supply of used stock continues to be affected by the global semiconductor shortage.
Business vehicle fleets and car leasing companies are having to keep vehicle’s longer than they normally would. The knock-on effect is less available used vehicles on the market.
The same problem is faced when buyers attempt to purchase new vehicles as the production has been seriously halted due to the shortage of semiconductors.
A recent major motoring journal survey found over 30% of new buyers had to change their preference and turn to the used vehicle market instead.
The editor of What Car?, Steve Huntingford, recently said: “The microchip shortage is causing a substitution effect in the new and used car market, with new car buyers increasingly switching to the used market in search for better deals and availability.
“The consequence of this has been increased upwards pressure on used prices, as well as stock limitations for some dealers, which in return is making it harder for some used buyers to find the right car. It’s a negative cycle which can only be expected to ease once the microchip shortage is resolved.”
The global semiconductor crisis is affecting all vehicle manufacturers which is causing delivery times in cases to take from 3 to 6 months.
The increased demand for used vehicles has created stock issues in that sector. With close to 70% of buyers stating they have been struggling to find the right car for them in the used market. Many also stated that they had seen prices increase for vehicle’s they had been considering purchasing.
Cap HPI have stated that their live trade values saw an overall increase of just over 3% which equates to more than £425 per car on average.
The price of used vehicles has been rising continuously and saw a 16% rise in just the last 4 months of 2021.
The same survey also shows that 40% of new car buyers has been told by their dealers that their may be possible delays on vehicle orders while over 50% stated they are struggling to find the right new vehicle.