COVID-19 driving force behind used car sales
Unprecedented tight supply of new cars in Australia due to the pandemic and people shunning public transport has sent used car prices soaring to record levels, with the automotive market in "uncharted territory".
Used motor vehicle prices rose by 3.8 per cent last week after increasing by 4.2 per cent in the previous week, and stock remains considerably low, according to data analytics firm Datium Insights.
Holden Commodore prices rose the most, up 9.8 per cent, followed by Toyota Hiace, up by 7.8 per cent, while passenger vehicles gained 6.5 per cent.
According to carsales.com.au, second hand Commodores can range from $71,885 for a 2017 SS V Redline to $2500 for a 2002 Executive.
A 2019 Commodore RS ZB is being advertised for $22,998 compared to $34,990 brand new.
Moody's Analytics auto economist Michael Brisson said light trucks, SUVs and utes were the most popular choice which has been helped by the lower petrol prices this year.
But Mr Brisson doesn't expect prices to continue to rise next year.
"I also do not expect prices to come crashing back down to pre-pandemic levels during the year, but the recent growth in prices is unsustainable," he said.
West Ryde man Sam Rawlings made the step and bought a second hand Mitsubishi Triton ute in July for $35,000, compared to around $42,000 brand new, after his previous car became "more expensive to fix than it was worth".
"I knew I wanted to purchase something near new, because I did the same with my previous car and it served me for nine years. That, plus I didn't feel like being stung with the immediate depreciation that comes with buying a new car," he said.
CarExpert co-founder Paul Maric said the 25 per cent increase in used cars prices over the past year, has seen the supply chain struggling to meet demand.
With fewer people buying new cars, there are fewer trade-ins and used cars hitting the market, meaning used car prices are now increasing.
Used car prices in September were 29.9 per cent higher than the same month in 2019 - and 3.8 per cent higher than August this year.
"Production of new vehicles was halted worldwide at the beginning of the outbreak, leading to global shortages of popular vehicles including in Australia," Mr Maric said.
"Used car dealers are telling us that the market is in totally uncharted territory. They're telling us that Australians want to buy cars but there just aren't enough out there at the moment."
Dealer Tony Bakhos from Sydney Car Exchange on the Parramatt Rd used car strip in Five Dock said he has seen an increase in sales across a "whole range" of brands.
This year, 644,891 new cars were sold by the end of September, down 20.5 per cent on last year.
And with the demand for used cars increasing and sales of new cars plummeting, Mr Maric said now is the best time for Aussies to consider selling their vehicles.
Toyota said they saw record sales in August, with over 2000 used cars bought and more than 17,000 sales for the year up to the end of October.
Originally published as COVID-19 driving force behind used car sales