Tight supply of new cars drove the price of Australian used cars to record levels in September.
Data from Moody’s Analytics reveals used car prices in September 2020 were 29.9 per cent higher than the same month in 2019 – and 3.8 per cent higher than August 2020, itself a high watermark.
“Now is the best time to be selling a used car, truck, SUV or ute on record,” says the latest Moody’s Analytics report into wholesale used car prices.
Just as SUVs have overtaken traditional hatchbacks, wagons, and sedans on the new car sales charts, used SUV and ute prices (up 8.7 per cent from August to September) are growing faster than passenger car prices (2.1 per cent).
The cause? With fewer people buying new cars, there are fewer trade-ins and used cars hitting the market.
“The increased demand for trucks and SUVs has been difficult to satisfy in the current environment,” the Moody’s report says.
“Production of new vehicles was halted worldwide at the beginning of the outbreak, leading to shortages of popular vehicles in lots across the world.
“Plants were restarted and the supply constraints for new vehicles eased, but the number of used vehicles continues to be limited.”
Sydney prestige used-car dealer Andrew Lyall told CarExpert the market is in “uncharted territory”.
“People want to buy cars and there aren’t any,” he said. “We’re in a supply and demand market, and there’s no supply.”
Mr Lyall said strong luxury car sales in June – when Mercedes-Benz and BMW set new monthly sales records – have dried up new stock, driving demand for lightly-used luxury cars to previously unseen levels.
“The hard thing is to get stock [to meet the demand],” he said.
As demand for used cars has jumped, sales of new cars in Australia have plummeted to levels below even in the Global Financial Crisis on the back of bushfires, nationwide lockdowns early in the year, and Victoria’s ongoing restrictions.
The year-to-date (YTD) tally for 2020 was 644,891 sales at the end of September, down 20.5 per cent on last year.
The last time cumulative YTD sales were this low at the end of September was in 2002.