The second hand car sales market has grown exponentially as Covid-19 restrictions ease, a development that wasn’t at all anticipated by the sector. The new car market is floundering in comparison, with the number of sold used cars and their value shooting up with no sign of stopping according to recent figures.
It is however not an economic surge that’s responsible for this latest market trend but a semiconductor shortage. Here we take a closer look at the rapid growth in the second hand car market and answer the question - should you cash in now or store for future value?
Semiconductors are integrated electronic circuits or chips that are crucial to the operation of many technologies. Pretty much anything that is computerised or utilises radio waves uses semiconductors. This includes new makes and models of vehicle as well as satellites, washing machines and portable devices.
In new cars, semiconductors play an integral role in the on-board computer, in fact, they simply cannot operate without them. Many car functions are controlled by semiconductor chips, including vital safety features like emergency braking, airbag deployment, and backup cameras.
If you haven’t heard already, there’s not just a national shortage of semiconductors but a global one. As a result, supply chains around the world are unable to provide the chips needed to service a large number of technologies.
The global chip shortage was sparked by the Covid-19 pandemic. Manufacturers expected little demand for brand new cars and other technologies due to the pandemic, and many cancelled chip orders as they thought Covid-19 would negatively affect sales. But with remote working continuing to play a vital part in many companies’ survivals and economic recovery better than anticipated, demand is higher than ever.
The trade war between China and the United States of America, and the fact that Taiwan – the global leader in the semiconductor sector – is currently suffering its worst drought in 50 years has meant demand is far outstripping supply.
With the global chip shortage, far less new cars are making it off the production line, and with this, car buyers are having to search the used car market for their latest set of wheels. The number of used cars sold has risen by some 23.9%, whilst the average price has soared to £19,018 according to the latest figures from Auto Trader.
Hang fire before listing your used car for sale however. The global semiconductor shortage is expected to last until 2023, which means if you store your vehicle with us a little longer, you could increase your profits and sell your car even quicker!
To find out more about our car storage services, please get in touch with our team today.
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