Demand for second hand vehicles skyrockets

Unavailability of new cars has been cited as one of the reasons for an increase in demand for second-hand vehicles.

A supply shortage of computer chips, or semiconductors, which are used to control everything from windscreen wipers to electric car batteries within the car has forced several manufacturing giants to slash production.

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UK manufacturers have been forced to cut production due to shortages, Germany's Volkswagen faces a similar dilemma while Toyota has dropped production by 40 per cent.

Large scale mass production of light vehicles effectively ended in Australia in 2017 which means motorists are reliant on overseas manufacturers for new cars.

Kangaroo Flat used car dealer Phil Doherty said a "perfect storm" of conditions had seen the demand for second hand vehicles skyrocket.

Everything from parts supply issues, shutdowns due to the COVID-19 pandemic, the computer chip shortage and even the high cost of containers to transport the cars to Australia has ignited the second hand market.

"Demand for second hand cars has been phenomenal the past 12 months," Mr Doherty said.

"I've been selling cars that don't even make it to the lot. They're sold before I even get them.

"I tell a buyer I have an ex new car coming in and they say, 'if it's as good as you say it is, I'll have it'.

"I've sold cars without a verbal conversation and that's never happened before.

"It's all by email. We just agree and send it off."

Such is the demand, Mr Doherty said he had a backlog of two to three weeks before a buyer takes possession of their vehicle.

"By the time you do the checks on the car and get a roadworthy, I have to tell a buyer it could be up to three weeks before they get the car because there's a list of people in front of you waiting for their car," Mr Doherty said.

He said most buyers who come in to see him know there's high demand at the moment because they have missed out on buying a car somewhere else.

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It has led to people having serious disagreements over a car on the lot.

"Let's say there's been some heated debate a couple of times," Mr Doherty said.

He said when the COVID-19 pandemic hit in March last year, he thought his car sales would decline.

However, online sales have gone through the roof as people in lockdown turn to the internet for shopping.

"People haven't been allowed to go overseas so they decide to holiday in Australia and find they're car is not up to it and decide to come in for a change," Mr Doherty said.

"But it's not just cars. It's all goods and services. I know someone who had to wait 14 weeks for a fridge because of supply issues."

With state borders now gradually opening and COVID-19 travel restrictions easing in the lead-up to the Christmas/New Year holidays, the demand for second hand cars doesn't look like slowing down any time soon.

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