The global parts shortage caused by the Covid-19 pandemic has had an unexpected side effect on the used car market. Cars that were registered during the pandemic are now entering the market with missing features and incorrect prices. These cars, known as “Covid cars,” were affected by the shortage of semiconductors, which are essential for various features in modern vehicles.
During the pandemic, the demand for semiconductors skyrocketed as people relied on electronic devices for entertainment and work while staying at home. This surge in demand led to a shortage of semiconductors, impacting industries beyond electronics, including the automotive industry. Car manufacturers, faced with limited supplies or none at all, had to make difficult decisions.
As a result, many new cars delivered in 2022 were missing features from their official specifications. These missing features can include wireless phone chargers, infotainment screens, head-up displays, sat-navs, mood lighting, and electric seat adjustment. Some cars were even built with analog instrument clusters and clocks and fitted with smaller wheels. Industry experts had predicted that these cars would enter the used car market within two years, and their prediction has proven correct.
Used car dealers and traders are now finding that these “Covid cars” are missing key items that should be present according to the official spec sheets. This creates a challenge for the motor trade in accurately valuing these vehicles. Marcus Blakemore of the Vehicle Remarketing Association has highlighted the difficulty of valuing these cars due to a lack of manufacturer data. Even car makers themselves may not have kept detailed records of how all cars were decontented.
Valuation guides like Cap HPI insist that data is available for some of these cars, but caution is still necessary. Different versions of the same trim can have subtle variations in specifications, making it important for dealers and consumers to pay attention to the details.
The issue of misdescribing a car sold by dealers and having it rejected by customers is a real concern under consumer law. The Motor Ombudsman has confirmed that dealers could face legal repercussions if they inadvertently misdescribe a Covid car. This adds to the urgency of the situation and the need for clarity.
Overall, the presence of “Covid cars” in the used car market poses challenges for both dealers and buyers. Dealers need accurate information to value these vehicles correctly, while buyers need to be aware of the potential missing features and ensure they are getting what they pay for. Transparency and clear communication between all parties involved will be crucial in navigating this new aspect of the used car market.
