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Don't expect used car prices to come down any time soon! New industry data reveals overblown prices are here for a while longer

According to an industry report, the average price of a used car is now $33,000.

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.”

Neil Dowling
Contributing Journalist
GoAutoMedia Cars have been the corner stone to Neil’s passion, beginning at pre-school age, through school but then pushed sideways while he studied accounting. It was rekindled when he started contributing to magazines including Bushdriver and then when he started a motoring section in Perth’s The Western Mail. He was then appointed as a finance writer for the evening Daily News, supplemented by writing its motoring column. He moved to The Sunday Times as finance editor and after a nine-year term, finally drove back into motoring when in 1998 he was asked to rebrand and restyle the newspaper’s motoring section, expanding it over 12 years from a two-page section to a 36-page lift-out. In 2010 he was selected to join News Ltd’s national motoring group Carsguide and covered national and international events, launches, news conferences and Car of the Year awards until November 2014 when he moved into freelancing, working for GoAuto, The West Australian, Western 4WDriver magazine, Bauer Media and as an online content writer for one of Australia’s biggest car groups. He has involved himself in all aspects including motorsport where he has competed in everything from motocross to motorkhanas and rallies including Targa West and the ARC Forest Rally. He loves all facets of the car industry, from design, manufacture, testing, marketing and even business structures and believes cars are one of the few high-volume consumables to combine a very high degree of engineering enlivened with an even higher degree of emotion from its consumers.
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