Price of used cars soar in Irish market
DUBLIN: The price of used cars in the Irish market is increasing significantly, according to a report from a second-hand car sales app. Sweep, which has been surveying the used car market in Ireland, found that used car prices in the country are rising, with an average of 6% higher this year than last.
A Volkswagen Golf hatchback is 9% more expensive this year than it was in 2020. The expected annual depreciation over the previous 12 months was 14%, however according to the survey report, an average Golf has depreciated by only 2%.
The annual depreciation of a Hyundai Tucson was expected to be 10% starting in 2020, but it has now been reduced to 1%, implying that its price is now 1% higher than in the past. While this price increase benefits car owners, it might be detrimental to low-income families.
Many reasons for price hike…
Sweep’s chief operating officer Conor O’Boyle said the Irish automotive marketplace is currently in a “truly unique place” due to a number of factors, including the COVID-19 pandemic, Brexit and the global chip shortage that is cutting production of new vehicles.
Sweep data show that imports of used cars from the UK, which peaked over 100,000 vehicles in 2018, have dropped by 39%. This reduction is expected to be caused by an increase in VAT and import duties as a result of Brexit.
The current global shortage of semiconductor chips, which is causing havoc in the world’s automobile industry, is also a factor in this. Ford’s US factories have suspended production of high-end models, such as the F150 pickup and Mustang sports car, until June. According to consulting firm AlixPartners, the global automobile sector would lose $110 billion in revenue this year due to a shortage of semiconductor chips.
The closure of international travel and tourism owing to the pandemic has also resulted in more cars entering the market from the rental car sector.
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