The cost of living is increasing, and it’s having a knock-on effect on a wide range of industries. While energy prices are affecting the country as a whole, businesses will be increasingly impacted by rising costs, demands, and trends. You don’t necessarily need to be a dealer or an industry expert to know that the volatility is having a severe effect on the new car markets, especially given the global chip shortage that’s limiting the production of new cars. That’s naturally had a big influence on used car prices too, which you may have noticed if you’ve spent any time browsing our online car auctions. So, the question now is – how long will the used car market face this price boom, and will it continue? We’ve got you covered.
What is the situation?
It’s pretty simple – essentially, the prices in the used car market have increased because inflation has put pressure on the industry. While this has impacted many areas of life, the car sales market has been disrupted because already costly materials are more expensive to buy for manufacturers, who have produced fewer cars as a result. This has been reflected in the used car market, as people trade in their old cars as a part exchange – creating a rise in demand, and fuelling a rise in prices.
There were of course peaks and troughs before the pandemic, as with any market, but relatively speaking, both had remained fairly steady. That’s changed today though – the level of inflation we are seeing across the country is unusual. The price of used cars increased 28% last year alone, compared to 7.3% the year before. While both years are above inflation, 2020 was more subtle. Inflation rises every year, but usually at a lesser rate.
Will prices continue to rise?
We don’t know for certain, but the signs are that they might. We know this isn’t great news, but here are a few things to look out for.Firstly, how the COVID bounce back goes will impact inflation. Businesses across the globe have struggled to return to capacity, and only one business in an entire purchasing line needs to slow productivity before the entire ecosystem of that particular industry changes.
Secondly, it depends on what happens with gas prices. Right now, these prices are high due to a number of global factors. Energy prices affect every business and impact how cheap products can be produced and distributed. Depending on when either of these two issues starts to relax will dictate when prices may change.
The used car market will still be prominent within the UK, but it looks like prices will continue to rise. That’s unfortunate for the buyer, but it doesn’t mean you can’t discover a bargain elsewhere. Take our used car auctions, for example!
We cater to a wide range of customers here at RAW2K, from casual drivers to hobbyist mechanics, all the way up to professionals looking to fix up and ‘flip’ a car for profit. We stock many trusted brands such as BMW, Ford, and Vauxhall, and all at great prices. Why not take a look around, and see what you can find?