Covid Cars' Create Valuation Nightmares for Used Car Market

Since Covid hit four years ago, car dealers and buyers are cautioned about an unexpected issue: vehicles registered during that period with equipment that doesn't align with their official specifications are now surfacing in the used car market, frequently unnoticed and inaccurately priced.

Dubbed as 'Covid cars,' these automobiles have been impacted by the worldwide shortage of components stemming from the pandemic in 2020 and 2021. Semiconductors, crucial for everything from heated seats to wireless phone chargers, became particularly scarce as manufacturers of phones, gaming consoles, and computers prioritized meeting the increased consumer demand during lockdowns.

In response to potential shortages or complete unavailability, several automobile manufacturers opted to remove numerous features reliant on semiconductors.

Due to this issue, many 2022 new cars delivered lacked specific features like wireless phone chargers, infotainment screens, head-up displays, satellite navigation systems, mood lighting, and electric seat adjustments.

Experts in the industry cautioned about the potential risk of these vehicles entering the secondhand market within two years. Their foresight has been validated, as one prominent trade group notes that with the increasing influx of these cars, dealers and traders in the used market are discovering discrepancies compared to the items listed on the official specifications.

“Marcus Blakemore of the Vehicle Remarketing Association highlighted various features, including heated seats, head-up displays, electric mirrors, seats, and spare keys. Some models even retained analogue instrument panels, clocks, and smaller wheels," he explained, mentioning two investigative working groups established to address these concerns.

"During our discussions with franchise dealers, we've encountered situations where their databases failed to acknowledge the existence of models with specific specifications, despite us physically having the car right there."

Blakemore highlighted the challenge for the motor trade in accurately valuing vehicles due to insufficient manufacturer information. He emphasised, "When even car manufacturers lack clarity on their products, it complicates the trade's assessment."

"Nevertheless, valuation specialists emphasise the presence of data, especially for specific types of vehicles. Dylan Setterfield, who leads forecast strategy at Cap HPI, noted, 'Manufacturers approach our team daily seeking guidance on establishing IDs with updated or scaled-back features.'"

"In each case, they evaluated whether the suggested change could impact the vehicle's valuation. If so, new IDs were generated. Yet, for vehicles briefly in production, manufacturers seemingly lacked comprehensive decontenting records."

"Moreover, when manufacturers release multiple versions of a trim level such as 'Trim Edition' and 'Trim Nav' that mimic the original, both dealers and consumers should be vigilant, as these vehicles, despite similar names, could vary substantially in specifications."

Blakemore has brought up concerns about dealers accidentally misdescribing a car they sold, leading to possible rejection by a disgruntled customer, confirmed by the Motor Ombudsman under consumer law.

"Many dealers and traders unknowingly purchase cars with a Covid history, which can complicate transactions," Blakemore explained, emphasising the importance of clarity in vehicle descriptions to avoid deal complications.

For your peace of mind, we list every important available feature in the used cars we sell after evaluation. So, there is no chance of mismatching features in our secondhand cars in Milton Keynes. 

Source and Image: AutoCar