New and used cars have seen gradual price increases from the onset of the pandemic. Initially, the rise in prices of used cars was due to supply constraints during the global semi-conductor crisis, buyers rushed for used cars raising the prices significantly within a short period.
Why are car prices up in 2022?
Many people don’t mind paying premium prices for the excitement of driving a car with a new registration, but prices of popular vehicles are soaring, with some hitting over 26%. Research highlights that the high cost of living and record-high fuel costs in the UK are pushing prices up.
Before the pandemic, used car sales were low, and the prices were competitive, but since lockdown, the demand for used cars has risen. There was pent-up demand from consumers who wanted to buy cars, people were also reluctant about public transport, leading to the need for affordable cars.
People saved money from the reduced non-essential shopping, spending their money on new and used cars due to the lack of social activities and holiday plans.
Will the prices go back down?
If you are waiting for vehicle prices to drop, you may be waiting a while, the UK market has a new car shortage, unlike the oversupply situation experienced before 2021. Besides, manufacturers are making up for the losses during the pandemic, which means prices may not fall in the short term.
Manufacturers are also designing sophisticated models with high-end technical features, which do not come cheap. But there is hope for electric car buyers since they may be cheaper than combustion engines in a couple of years due to demand and technology.
Used car buyers will still feel the shortfall of new vehicles for a couple of years, prices have risen by over 30% so it’s hard to imagine they will drop back to where they were in 2019. Even if used cars prices decrease, the reduction will not be anywhere near as significant.
Tips for getting the best deals
If you’re looking for a new car you can still get the best deals by finding pre-registered vehicles, these are nearly new models since they were surplus stock sold to dealers at lower prices to clear excess deliveries. Pre-registered cars provide value for money since they have only a few miles on the clock.
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You may also find affordable deals when the number plates are changing over, motor dealers don’t want older models taking up space in their showrooms. Remember to get quotes from your local private or motor trade insurance broker so you have an idea on the cost of your new or amended insurance policy.
While new and used vehicles prices continue to rise, the cost of living may reduce demand and reduce prices. Many customers prefer to wait for new models than pay similar prices for vehicle with mileage, the used car market is likely to settle down when the sale of new cars increase.