Drivers are giving up on buying new cars as a lack of availability created by the microchip shortage causes vehicle sales to slump to the lowest level in more than two decades.
Registrations of new vehicles plunged almost 30pc in July to 123,296 compared with a year earlier – the lowest level since 1998, according to the Society of Motor Manufacturers and Traders (SMMT).
Would-be buyers frustrated by the semiconductor shortage are turning to the used car market, where prices have risen for an unprecedented four months running.
A string of car companies have been forced to halt production in recent months as they do not have the computer chips essential to build vehicles.
Alex Buttle, director of used car marketplace Motorway.co.uk, said: “While there is potentially strong demand out there to buy a new car, many frustrated buyers are not willing to wait six to nine months, or even longer on some models, to take delivery of their new motor.”
Some forecasters believe the semiconductor shortage could last well into next year, and manufacturers are scrambling to secure fresh Suppliers.
To preserve profits, car companies are taking desperate measures such as funnelling supplies of chips they can get into their most profitable models, while downgrading technology on less expensive models, such as using old-fashioned analogue speedometers instead of digital ones.
Low sales in July, the first full month of dealers being open after the latest lockdown, were compounded by UK carmakers being hit by the “pingdemic”, requiring manufacturing staff having to self isolate.