It’s never been more expensive to buy a used car in Australia – but that might not be the case for much longer.
Data from Moody’s Analytics reveals it’s 34 per cent more expensive to buy a used car right now than at the same point in 2020.
Prices are also up 10 per cent on the start of 2021, but there’s evidence the price of even the most in-demand cars will start to level out in the coming months.
At one point in 2020, the price of a one-year-old Toyota HiLux with around 30,000km on its odometer was close to 90 per cent to the list price of a new one.
“This price ceiling put a cap on the gain that could be realised in the segment,” Moody’s says.
In the second quarter of 2021, the price of utes like the HiLux declined – albeit by just 1 per cent. Moody’s forecasts that trend will continue throughout the second half of the year.
“The end of used vehicles as an appreciating asset despite usage is upon us,” the report says.
“It took a confluence of unpredictable circumstances… to flip the market on its head. It will not take that much for the market to return to normal.”
So, why did the price of secondhand cars still rise overall between April and June?
According the the report, it’s on the back of the semiconductor shortage facing carmakers.
The majority of brands in Australia are facing significant supply shortages, with the exception of Chinese brands MG and Great Wall Motors.
Demand for cars is high, and manufacturers can’t bring enough into the country to meet it. Rather than waiting, buyers are instead looking at lightly-used cars – and they’re willing to pay for them.
“This second rise appears to have slowed in June, but supply issues continue to put upward pressure on both new- and used-vehicle prices.”
“The supply constraint was further exacerbated by the record rate of new-vehicle sales in Australia in April.”