Used car experts have warned the second half of 2021 may pose problems with the supply of secondhand cars not keeping up with demand from consumers.
The secondhand car market has been booming since lockdown restrictions were first eased – and this is on the back of a decline less than half that experienced by the new car market last year.
What’s more, this sluggish 2020 demand for new cars is set to affect the used car market in the second half of 2021, according to Rupert Pontin, the deputy chair of the Vehicle Remarketing Association and head of insight at Cazana.
“The second half of 2021 will see some potential used car supply challenges, driven mainly by shortages of new cars.
“If this happens, it will mean there will be restricted supply of late-plate used stock that would normally have come from manufacturer employee car schemes and demonstrator programmes.
“This may not affect all manufacturers, but it will, without doubt, be a disrupting factor for some and therefore the market as a whole.
“The coming months will be remarkably interesting as the used car market balances supply with demand post-COVID lockdowns.”
‘Acute shortages’
Meanwhile, Derren Martin, head of valuations at Cap HPI, warned the ongoing semiconductor issue that is now affecting the supply of new cars in 2021 could start to impact the used market later in the year.
“For the remainder of quarter two, manufacturers may well have stock into which they can switch customers, which will in turn generate part-exchanges and fleet returns for the used market.
“From late June and into July however, stock levels will have dwindled and the component shortage could well be impacting supply more acutely, depending on the brand,” he said.
“Much of the strength in live values during April and May has been due to lower supply than normal from low registrations in March and April – driven by Covid issues affecting factories and also by lockdown, plus concerns about future supply.
“The semiconductor issue could well not have done its worst yet.”
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