As a global shortage of semiconductor chips continues to stifle the new car market, the used car sector has witnessed rocketing prices and sales growth.
According to the Society of Motor Manufacturers and Traders (SMMT), second-hand sales are up 16.4 percent year-to-date versus 2020.
DVLA and Department for Transport figures also show drivers are keeping their cars for longer. In 2019, there were 6.1 million cars over 13 years old taxed – around 20 percent of the UK total. In 1994, by contrast, there were only 1.3 million in the same age group.
Used cars in demand
Data from aftermarket warranty provider Warrantywise shows a larger number of motorists are extending their leasing deals due to lack of new vehicle availability –with some waiting up to 12 months for a replacement car.
Uncertainty about the impending 2030 ban on petrol and diesel cars may have exacerbated the situation, with many drivers undecided about switching to an EV.
The result, reported in October, was a £3,000 increase in the average used car price over five months, when Auto Trader also said nearly one in four nearly-new cars were more expensive than their new equivalents.
Average warranty is five years
The ageing car population means many cars are well beyond their manufacturer warranty, too. Traditionally, most brands offered three years and 60,000 miles, but Warrantywise says the average length of cover is now five years.
Kia has famously offered a seven-year warranty since 2006, but even the 10-year warranty recently announced by Toyota and Lexus (dependent an annual servicing at a franchised dealer) wouldn’t cover many of Britain’s ageing cars.
Indeed, Warrantywise reports that only 15 percent of drivers opt for an extended warranty once their manufacturer-supplied cover has run out.
“Our research shows the average new car warranty lasts for just five years, meaning that there is a significant percentage of the UK population driving used cars that are not protected by warranty cover and therefore presenting a significant financial liability to their owners,” said Lawrence Whittaker, CEO at Warrantywise.
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