Virus driving car prices
Tight supply, public transport fear make second-hand vehicles costly
A TIGHT supply of new cars in Australia due to the pandemic and people shunning public transport have sent used-car prices soaring to record levels, putting the automotive market in “uncharted territory”.
Used motor vehicle prices rose by 3.8 per cent last week after rising 4.2 per cent in the previous week — and stock is 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 overall 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 model.
A 2019 Commodore RS ZB is being advertised for $22,998 compared with $34,990 when it was new.
Moody’s Analytics auto economist Michael Brisson said light trucks, SUVS and utes were the most popular choice, helped by the lower petrol prices this year.
But Mr Brisson did not expect prices to continue to rise in 2021. “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.
Sydney man Sam Rawlings bought a second-hand Mitsubishi Triton ute in July for $35,000, compared with about $42,000 new, after his 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,” he said.
“That, plus I didn’t feel like being stung with the immediate depreciation that comes with buying a new car.”
Carexpert co-founder Paul Maric said the 25 per cent increase in used car prices over the past year had resulted in the supply chain struggling to meet demand.
With fewer people buying new cars, there were also fewer trade-ins and used cars hitting the market, meaning used car prices were rising.
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.”