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second-hand car
  1. Car News
1st January 2022

Is now a good time to buy a second-hand car?

The UK has seen a huge rise in second-hand vehicles being sold. But does that mean you should jump on the trend or buy a new car?

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The second-hand car market in the UK is currently thriving due to the shortage of new models, and cars under three years of age, for a variety of reasons. 

According to some figures the used car market has grown astronomically since the pandemic began, with more than 2.2 million used cars exchanged since 2019.  

However, despite the rise in second-hand cars being sold, the UK has also seen a rise in the number of brand-new vehicles sold via PCP finance. But with new cars currently hard to get hold of due to the chip shortage, should prospective car buyers be looking into the used car market, or wait until new cars are easier to purchase?

A global shortage of computer chips used in car production, as well as other materials such as copper, aluminium and cobalt, has led to fewer new vehicles rolling off production lines. That has meant more buyers turning to the used-car market.

What factors are affecting the car market in 2022?

The car market in 2021 has been particularly affected by two major factors: job losses due to Brexit and – most notably – the chip shortage, which has stopped the movement of millions of cars during the past 12 months. Production in 2021 has only been 14% higher than 2020, despite factories being closed for most of 2020 due to the height of the pandemic, while output has been down 32%. 

Of course the car industry has not been the only industry to suffer from the global chip shortage, but despite popular demand, the car industry has struggled to deliver brand new cars to buyers. Computer chips are used in everything from modern infotainment systems, windscreen wipers and electric car batteries to name a few.  

It’s estimated the chip crisis will cause 100,000 vehicles to not be delivered before the end of 2021, representing a huge blow for the industry. 

What does that mean for used car buyers?

The chip crisis has seen a massive increase in the prices of second-hand cars, which is fantastic if you’re selling, but not so much if you’re buying. The public have turned to second-hand cars, particularly those made within the past five years, when looking for a new car. 

Researchers have discovered the price of the most popular used cars have increased by as much as 59% since 2019, with five-year-old Ford Fiestas among the most popular, having increased by over £2,000. 

When is a good time to buy a used car?

Depending on your financial circumstances and the urgency of your need for a car, you may wish to buy a used car rather than wait for a new one, as the disruption to the global car production line is set to last well into 2022. 

Number plates in the UK change in March and September. This means during these months in particular, new cars are extremely popular. During this time, new car buyers typically look to sell their current vehicle. Of course used car buyers can take advantage of these opportunities by driving down the price of a vehicle as the owner may be desperate to sell their current car to help finance their new one. 

Historically, the last three months of a calendar year is when most used cars are sold, with the rollout of new number plates a big reason for this.  

Is now a bad time for buying a used car?

Along with the final three months traditionally being a great time for used car buyers, deals can spill over into the new year. This is because dealers are still trying to clear last year’s inventory, and as the end of the year approaches, they’ll offer good deals on cars they have in stock in order to try and hit their yearly targets, meaning you could find a great deal on a brand new car for the same price as the used one you were looking at online. 

How do I get a good deal on a used car?

If you’re currently in the market for a used car, there are some great ways you can get affordable options on some terrific models at the moment. 

  • Buy out of season – If you can try and hold off until the new year when the demand for cars has died down you can freely search for cars at a more reasonable rate than the inflated prices you may be experiencing currently.
  • Get an insurance quote – Before you jump in and buy a car, you should always check with an insurer to see how much it will cost you for insurance. There’s no point buying a car if you can’t afford the subsequent insurance.
  • Look to London – Due to the new ULEZ zone that came into effect last month, the used car market is flooded with London residents looking to sell their car quickly due to the emission charges. 

What are the benefits of buying a used car? 

If you’re unable to wait for a new vehicle to arrive due to the chip crisis, the main benefit to buying a used car in 2021 is you’ll receive it a lot sooner than a new vehicle. Another major benefit is despite the incredible rise in values for used cars, they are still cheaper for the average car buyer than buying from new.  

You’ll also be able to sort your insurance a lot easier. Most new car buyers won’t be able to get an accurate price on their insurance as the model may not have hit the road yet, especially if you’re among the first group of buyers in the UK. 

Buying a used car will mean you can get an immediate quote and competitive price from Sterling Insurance.

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