Is now the perfect time to trade in your car?
Used vehicle prices in Australia continued on their downward trend in August this year, though they still remain higher than in pre-COVID times.
Financial intelligence company Moody’s Analytics says the decline in used vehicle prices was expected, with global vehicle production increasing and price pressures in the used car segment easing.
The data firm reports overall used vehicle prices are 2.2 per cent lower than they were in July and are 11.3 per cent lower than a year ago.
Used vehicle prices are also 15.2 per cent lower than their peak in May 2022, however, they are still 49 per cent higher than the pre-COVID level in August 2019.
While prices of used passenger cars and SUVs continue to decline, the prices of utes are falling at a quicker rate. Moody’s Analytics claims this is because of “significant cuts” in the production of passenger cars in the recent years.
Supply-chain constraints have also made manufacturers prioritise larger vehicle with higher profit margins.
Prices in the used car segment decreased 3.2 per cent from July to August, and are down 9 per cent from a year earlier, whereas the used ute/SUV segment decreased 0.4 per cent from July to August, and is down 14.3 per cent from a year earlier.
The retention value index decreased 2.7 per cent from July to August, and is 9.8 per cent lower than a year earlier.
As recently reported, last month registered the most new-vehicle deliveries in any August, with 109,966 vehicles sold. This marks yet another record-breaking month of new-car sales in Australia.
Moody’s Analytics notes these record-breaking new-car deliveries are a reflection of the easing of supply-chain disruptions.
The data firm projects used vehicle pricing is expected to fall by 9.5 per cent in 2023, and a further 8.7 per cent in 2024 before stabilising in 2025.