The average price of a used car in the UK has soared by almost a third over the last 12 months.
Data from online car dealer Auto Trader revealed that on a like-for-like basis car prices have gone up by 32 per cent to around £18,000 – meaning that motorists are now paying a 15 per cent premium on second-hand cars.
Despite the surge in prices, used cars are now selling faster than ever, with the turnaround going down from 52 days last year to 30 days.
As a result of the pandemic first and now the war in Ukraine, the gap between demand and supply has widened, with dealers reporting strong order books despite a squeeze in the costs of living.
On the supply side, a combination between the pandemic-induced shortage of semiconductors and the implications of the war in Ukraine cut production significantly.
According to figures from the Society of Motor Manufacturers and Traders (SMMT), car production in March fell to the lowest since 1998, with new car registrations falling by 14.3 per cent to 243,379 units.
“March is typically the biggest month of the year for the new car market, so this performance is deeply disappointing and lays bare the challenges ahead,” said SMMT’s chief executive Mike Hawes.
BMW and Volkswagen were among some of the automotive marquees to be hit.
BMW’s chief executive Oliver Zipse, who cut the company’s 2022 profits by 2 per cent, said last week chip shortages are expected to remain well into 2023, while Volkswagen’s production was put into question because of a shortage of wire harnesses, City A.M. reported.