What goes up must come down
Used car values are still currently high due to the ongoing issues with new car production. But for how long? GAP insurance is available to new and used cars and can protect the value in your vehicle.
The impact of Covid-19 and the global chip shortage continues to be seen on the UK car industry and new vehicle production with 2021 figures down by more than a third on 2019, and its lowest level since 1956. New car sales in 2021 were down almost 29% on pre-Covid 2019, the second worse year since 1992, according to SMMT.
With the shortage of new cars available and long wait times now anything from six months to a year, consumers and businesses have turned to the used car market which shows a 5.1% increase in Q1 2022 with 1,774,351 cars changing hands. High demand has seen used cars retain or in some cases appreciate in value. However we could see the chip shortage fully resolved by 2023 at which point car values may start to drop and return to normal.
GAP Insurance can protect your vehicle’s value and avoid a financial shortfall in the event your vehicle is written off. The majority of vehicles purchased today are on finance with low monthly payments and consumers and businesses run the risk of negative equity when market values are insufficient to clear outstanding loans. GAP Insurance can provide peace of mind in these uncertain times.