Used car prices fall for first time in two years

New figures from the Office for National Statistics show that the prices of used cars fell by 2.7% in the year to October.

"This is the first month that it has gone negative since the onset of the pandemic. However, it follows 23pc growth in the year to October 2021, meaning that prices are still much higher than before Covid." According to The Telegraph.

Government-mandated shutdowns of semiconductor factories during the Covid-19 pandemic was the leading cause of the 30% price rise as production of new cars slowed down drastically. It also meant that some customers were given waiting times of up to 18 months for their new car to arrive.

Demand also went up at the start of the pandemic. David Bailey, professor of business economics at Birmingham University believes this was from people wanting to buy a car to avoid catching coronavirus on public transport.

Statistics from Auto Trader showed that asking prices (as opposed to selling prices) were 5% higher at the start of November, based on 900,000 price observations every day across the whole retail market.

A spokesman from Auto Trader told the Telegraph that while prices are decreasing, it's a gradual decrease rather than a crash and will be some time until prices return to pre-pandemic levels.