It’s safe to say that the new and used car markets have both had some pretty tumultuous ups and downs over the past few years. If you’ve been in the market for a new vehicle at any stage since March 2020, you’ll probably have found that it’s required some fairly canny timing - or else, a fair chunk of your savings. Now, that’s where online car auctions like ours can come in handy, as they’re great places to pick up a bargain on a used car or salvage car (depending on whether or not you’re planning on driving it at any stage in the near future).
Since you’re reading this, you probably already know that in general, the prices of used cars have been abnormally high in the last few months especially. But now that we’re entering a brand new year, here’s the prevailing question: are the prices of used cars finally stabilising?
Why have prices been so high?
First off, it’s worth a quick recap on exactly what’s been causing these rising prices over the past few years. It mainly comes down to two key factors: the Covid-19 pandemic, and the semiconductor shortage it’s indirectly helped cause.
Semiconductors are a key component of many household electronics and consumer vehicles, and there was a spike in demand for the former during the various lockdowns across the world. That, coupled with the fact that the semiconductor manufacturing industry was itself forced to shut down for a period, means that there are now fewer available for the construction of new cars, almost all of which require semiconductors to function. With a shortage of new cars, that’s left many consumers to turn to the used car market.
That’s had quite a hair-raising effect on prices. The average used car price during December 2021 rose to £17,816 - that’s more than 30% higher than in the same month in December 2020.
So what happens now?
To be honest, while there have been some tentative signs that prices will stabilise, most experts agree that used car prices will probably remain high in the first few months of 2022, as the global production remains affected by the pandemic.
However, it’s worth noting that Derren Martin, the head of valuations from cap hpi, has suggested that we may well see a normal second half of the year when it comes to deflation. In other words, prices may sink again until they’re closer to pre-pandemic levels, although - and this is crucial - industry observers tend to agree that they’re unlikely to return to properly pre-pandemic levels for some time at least.
So if you’re looking at offloading a used or salvage car that you’ve been holding onto for some time, it’s worth doing so sooner rather than later! If you’re in the market to buy though, don’t be put off - there are still some great deals to be had, you’ve just got to be pretty quick off the mark to get them! Happily though, you’re in exactly the right place. We’ve got plenty of vehicles to choose from in our online car auctions right here at RAW2K, and our auctions are refreshed on a daily and weekly basis, so there are always new deals to be had from a range of leading manufacturers like Volkswagen, Citroen and Vauxhall. Why not look around our site, and see what you can find?