The number of second-hand vehicles available in Ireland has dropped, creating a storm in the car market as supply cannot meet demand.
This lack of supply has been caused by the Covid-19 pandemic, Brexit, and the global shortage of semiconductor chips which has forced the price of second hand cars upwards.
Phil Fitzgerald, of Electric Autos in Co Kildare, told Prime Time that his dealership sources 99% of its used cars from the UK where there is a much larger supply.
Fitzgerald said: “At the moment, you have to pay 23% customs when you’re coming across from mainland UK and import duty on certain cars.
“That ups the price.”
Before this year, Fitzgerald would usually have 10 cars in stock but at the moment it is half that amount.
He said: “It’s quite hard.
“We need to sell so many cars a month just to make ends meet.
“Like all businesses here, we have to pay rates, insurance, wages.
“If you don’t sell enough cars or you sell under your quota, you’re struggling.”
The shortage of semiconductor chips, which are an essential part of the manufacturing of modern cars, has also added to the shortage of used cars in Ireland.
Motoring Journalist Geraldine Herbert told Prime Time: “These are the chips that are used in everything from your toaster to your cars.
“During the pandemic, and during the lockdown, car manufacturers closed their factories.
Herbert added: “As a result, they cancelled orders for chips.”
As these chips are also used in smart devices, during lockdown when people were working from home and home-schooling, there was a “surge in demand”. When manufacturers could open again, they found themselves trying to catch up.
The pandemic, Brexit and the lack of semiconductor chips are all affecting the supply of cars. This could mean good news for some as a new DoneDeal report shows that your second-hand car could be worth more than 40% more than it normally would.
The new analysis was published as part of a used-car price index based on millions of listings.
It says: “The increase in prices has outweighed depreciation rates for most vehicles and is having the greatest impact on the lower end of the market.”
The example given in the report is a Volkswagen Golf that was bought last year: “The same car today, a year older, and with 20,000 extra kilometres on the odometer, is an average 15pc more expensive.”
Supporting the report is analysis by economist Dr Tom Gillespie who found that depreciation and increased mileage which would normally make cars cheaper are being beaten by overall price inflation.
The soaring demand means many cars have increased rather than decreased in price as they normally would.
