The average second-hand car is increasing in value by 20% within the first six months of being sold, shocking figures have revealed.
While cars are notorious for depreciating in value - usually by five per cent after leaving the forecourt - an unprecedented demand for used vehicles coupled with a chronic supply shortage for new cars has reversed the age-old trend.
Experts have described the anomaly as a 'once-in-a-generation development'.
It comes as commuters who moved further out of the cities due to the Covid-19 pandemic are now in need of a car to get to work, while white-collar workers who saved more than expected are looking to splurge on a new motor.
But the new demand has been met with a global shortage of semiconductor microchips, which are essential for the operating systems of all vehicles.
It means there is a shortage of new cars being manufactured, leading to an unprecedented demand for second-hand models.
As a result, an investigation by The Times found the price of some cars rose by almost £10,000 in the space of five months and continued to increase.
'What we are seeing here is absolutely unprecedented — a once-in-a-generation development that is turning the rules of car valuations on its head,' Derren Martin, head of valuations for Cap HPI, a vehicle valuation service, said.
While motors are notorious for depreciating in value - usually by five per cent after leaving the forecourt - an unprecedented demand for used vehicles coupled with a chronic supply shortage for new cars has reversed the age-old trend (file photo)
Britain's Society of Motor Manufacturers and Traders has cut its forecast for new car registrations for 2021 by 24 per cent, from 2.4 million to 1.8 million (file photo)
'Second-hand cars are appreciating, rather than depreciating, in value.'
The semiconductor microchips needed to make new cars have been in short supply due to Covid-related closures in factories from Turkey to China.
The same chips are also used in PlayStation and Xbox gaming consoles, which have been bought in record numbers for children confined to their homes during global lockdowns, only adding to the supply shortage.