There had been a hope that August could be a turning point in the ongoing chip shortage currently battering the global automotive industry; however, that hope came and went with the reality that a resolution in 2021 is not likely. In fact, the UK now looks to be experiencing a direct hit from the chip maelstrom that we’ve seen in other markets in recent months.
For August, used inventory levels dropped by 7.2% from July, a sharp decline likely impacted by the historic drop we’ve witnessed with new vehicle production (SMMT highlighted that July production was the lowest since 1956). With new production likely to be constrained well into 2022, it’s probable that we’ll see used inventory remain low with the potential to drop even further.
This shortage in inventory coupled with consumers who are both looking for private mobility post-COVID and flush with excess funds due to a lack of spending and holidays over the last 18 months has led to a surge in prices. The average used listing price rose 4.8% from July to nearly £17k and is up over 21% from last year, creating an odd situation where your vehicle could be an appreciating asset.
The drop in inventory has impacted the number of days that vehicles are available on market, as well – the average days-on-market is now down 18.7% from last year and is just above 61 days.
We’re likely to see further declines in used inventory in the coming months with an additional appreciation of prices combined with a decline in days-on-market as new production remains low.
To learn more about the trends impacting vehicle inventory, download the CarGurus Vehicle Availability Index & Insights August 2021.