Never has it been so hard to get a used car at an affordable price and, faced with global economic uncertainty and the effects of climate changes, it may not get a lot better in the short term.
Australia has not been left untouched by the global new-car and used-car drought that has left buyers scrambling for mobility at almost any price.
The average used-car price is now $33,000 according to the latest report from AutoRadar, a division of Cox Automotive.
That’s up a huge $10,500 on prices in early 2020, before the start of the pandemic.
AutoRadar also revealed the gap between the asking price of used vehicles, and the price realised on the sale, had shrunk dramatically.
That indicates high demand and quick sales, benefitting sellers but making life petty competitive for buyers.
Auction group Pickles told CarsGuide that at the end of last year, it didn’t think auction and fixed-price sales could get any stronger.
But Pickles general manager Motor Vehicles, Brendon Green, said ongoing used-vehicle shortages have seen used-car prices “climb to unprecedented levels”.
“Of note, passenger vehicles such as Toyota RAV4 Hybrid, Volkswagen T-Roc, and the Mazda CX range have proved very popular, with many younger assets making or exceeding the recommended retail price,” he said.
“Virtually all light-commercial vehicles including Toyota LandCruiser, Toyota Hilux, Ford Ranger, Isuzu D-Max and others have continued to exceed expectations and jumped in price between $8000 and $12,000 since the start of the pandemic.
“This has probably been spurred on by Australia’s love of everything outdoors, roof-top camping, four-wheel driving, and towing boats and caravans.”
But its not just the light-commercial sector that is seeing this upswing in used car prices, Mr Green also said the prestige, luxury, and collectible vehicle segments had also seen “enormous growth” over the past 18 months, even outperforming the average upward trend.
“Wait times on new vehicles are quite significant across many prestige brands,” he said.
“Many Australians are fairly well cashed up after cancelling annual overseas holidays and have splashed out to update to a near-new BMW, Mercedes Benz or Audi in our auctions.”
For the future, Mr Green said the expectation was for even more pressure to be placed on new-vehicle demand and quality used vehicles because of the recent floods in Queensland and NSW.
“We don’t see the used prices declining in the short term,” he said.
“In fact, we expect that new-car supply will be challenging for 2022 and probably through most of 2023.
“Strong new car supply is probably the main driver that would see used vehicle prices decline, however some customers are a little nervous about future interest rate rises, petrol prices, and the wider effects of the events taking place in the Ukraine.”
Keyword: Don't expect used car prices to come down any time soon! New industry data reveals overblown prices are here for a while longer