Auto Trader, the UK’s largest digital automotive marketplace, has reported a decline in used car values for the third consecutive month. This news comes as a surprise to many industry experts who had predicted a steady increase in prices due to the ongoing global chip shortage and increased demand for used vehicles.
According to Auto Trader’s latest data, the average price of a used car in the UK dropped by 1.2% in the month of September. This follows a 1.8% decline in August and a 0.7% drop in July. These consecutive declines have resulted in a total decrease of 3.7% in used car values over the past three months.
The reasons behind this decline are multifaceted. Firstly, the global chip shortage has severely impacted new car production, leading to a surge in demand for used vehicles. This increased demand initially drove up prices, but as supply chain issues persist, it seems that buyers are becoming more hesitant to pay inflated prices for used cars.
Another factor contributing to the decline in used car values is the end of the UK government’s furlough scheme. As this scheme comes to an end, many individuals who were previously on furlough may now be facing financial uncertainty, leading them to postpone or cancel their plans to purchase a used car.
Furthermore, the ongoing uncertainty surrounding Brexit and its impact on the economy has also played a role in the decline of used car values. With potential changes to trade agreements and tariffs, consumers may be more cautious about making large purchases such as cars.
Auto Trader’s data also reveals that certain segments of the used car market have been hit harder than others. For example, electric vehicles (EVs) experienced a decline of 2.2% in value, while petrol and diesel vehicles saw a smaller decrease of 1.1%. This could be attributed to the reduction in government incentives for EVs and concerns about the availability of charging infrastructure.
Despite the decline in used car values, industry experts remain optimistic about the future. They believe that as the global chip shortage is resolved and new car production ramps up, the demand for used cars will stabilize, leading to a potential rebound in prices. Additionally, the upcoming festive season and the release of new car models may also stimulate demand and positively impact used car values.
In conclusion, Auto Trader’s report on the decline in used car values for the third consecutive month highlights the complex factors at play in the automotive market. The global chip shortage, the end of the furlough scheme, and Brexit-related uncertainties have all contributed to this decline. However, experts remain hopeful that as these issues are resolved and consumer confidence improves, the used car market will regain its strength.
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- Source: Plato Data Intelligence.
- Source Link: https://zephyrnet.com/third-consecutive-monthly-drop-in-used-car-values-auto-trader-reports/