How 'Covid cars' are affecting the used car market

Semiconductor shortages resulted in changes in production

Covid may have struck four years ago but car dealers and buyers are being warned of a worrying side effect: cars registered at the time whose equipment level didn’t match their official specification and are now entering the used car market, often undetected and incorrectly priced.

Called ‘Covid cars’, these vehicles are victims of the global parts shortage caused by the pandemic in 2020 and 2021. Semiconductors, the brains behind everything from heated seats to wireless phone chargers, were the hardest parts to get hold of as phone, games console and computer manufacturers rushed to satisfy the surge in demand for their products from people confined to their homes.

Faced with the possibility of limited supplies or even none at all, some car makers deleted many of the features that depended on semiconductors.

As a result, a significant proportion of new cars delivered in 2022 were missing features from their specification, including wireless phone chargers, infotainment screens, headup displays, sat-navs, mood lighting and electric seat adjustment.

Industry experts at the time warned of the risk of such cars entering the used car market within two years. Their prediction has proved correct, with one leading trade organisation observing that as the cars have started arriving in volume, used market dealers and traders are finding they are missing key items present on the official spec sheets.

“These can include heated seats, head-up displays, electric door mirrors, electric seats and duplicate keys,” said Marcus Blakemore of the Vehicle Remarketing Association, which has set up two working parties to investigate the issue. “Some cars were even built with analogue instrument clusters and clocks and fitted with smaller wheels,” he said.

“We’ve had conversations with franchise dealers who have looked at their databases and insisted that models with certain specifications just can’t exist, when we’ve had the car in front of us.”

A lack of manufacturer data on the cars is making it hard for the motor trade to value the vehicles accurately, according to Blakemore. He said: “If even car makers don’t know what they were sending out, it makes the trade’s job very difficult.”

However, valuation guides insist data is available, at least for some of the cars. Dylan Setterfield, head of forecast strategy at Cap HPI, said: “Our new vehicle data team was being asked questions every day by manufacturers about creating IDs with revised or reduced specifications.

“On each occasion, a decision was made as to whether the requested change would be likely to have an impact on the valuation of the vehicle and, in these cases, new IDs were created. However, for some vehicles that were only available for a short period of time, it appears that manufacturers may not have kept detailed records regarding how all cars were decontented.

“Also, where OEMs introduced multiple versions of the same trim with subtle variations in the name such as ‘Trim Edition’ and ‘Trim Nav’, where ‘Trim’ is the original model trim, more care needs to be taken by dealers and consumers as vehicles which sound very similar can have quite different specifications.”

Meanwhile, Blakemore has raised the issue of dealers inadvertently misdescribing a car they had sold and having it rejected by an aggrieved customer – a real possibility under consumer law, the Motor Ombudsman has confirmed.

“So much stock is bought ‘blind’ by dealers and traders that many don’t realise they have bought a Covid car,” said Blakemore. “Nobody wants the drama of misdescribing a car because it means unwinding the deal. We just want clarity.”