The price of used car have risen 56 per cent on average over the last two years, In the last three months of the year, the inflation rate for used cars grew a further 7.7%, the second highest quarterly price rise since 2011, according to a report by online marketplace Donedeal.
The author of this report, Dr Tom Gillespie, an environmental economist at NUIG, said: “The supply chain disruption caused by the pandemic and the realisation of Brexit market consequences resulted in a perfect storm for used car price inflation.”
“The big global story in 2021 in the motor industry was the persistent under-supply of semi-conductors, a crucial component in new cars.
“Longer waiting times for new cars incentivised consumers to turn to the used car market, which offered little in the way of relief, as supply of used cars was also under strain.”
He said the beginning of Brexit has disrupted the usual flow of used cars from the UK. “In 2019, just before the beginning of the pandemic and Brexit, we imported 108,000 cars from the UK, in 2020: 74,900, and in 2021 the total number of used car imports from the UK was just 47,034.”
The report predicts that the elements contributing to car price inflation are showing few signs of easing in the short term. For buyers looking to trade in their old cars, it means they have stronger bargaining chips as car dealers struggle to maintain their inventor, Dr Gillespie said.
According to Gillespie “People are suggesting that the semiconductor shortage will last well into 2022. The shock in new car supply directly affects the used car markets. So it doesn’t look like it’s leveling off anytime soon,”