The Sunday Mail (Queensland)
Used car buyers beware: Prices won’t go down for two years
IT COULD be two years before the absurd prices being paid for used cars ease, experts fear.
The warning comes as secondhand dealers struggle to re-stock and trouble plagues the importation of new cars and parts during the coronavirus pandemic.
Exclusive Carsales.com.au data shows the median price for a Toyota LandCruiser has risen 50.7 per cent while the ultimate run-aroundtown vehicle Toyota Corolla has risen 30.5 per cent.
The Carsales.com.au statistics compared March 2020, when coronavirus cases began to sweep the nation, with March 2021.
“Our research throughout the COVID period showed there are a significant number of people adding a car to their family, or buying a new car and not trading in their old one,” said Carsales editor-in-chief Mike Sinclair.
The retention of vehicles is one reason second-hand cars were in short supply and it is just one issue confronting dealerships, said Motor Trader’s Associations of Queensland (MTAQ) remarketing division chairman Peter Dever.
Coronavirus-related factory closures in car-manufacturing countries have “choked new car supply lines and in turn reduced the number of vehicles being traded in,” Mr Dever said.
“The knock-on effect is that usually for every new car sold, one is traded-in but they’re not, and so we have a shortage.”
On that basis, Mr Dever said he could not see a way out of the supply-demand rut for up to two years and that’s providing car manufacturers ramp up their production.
“It’s just ridiculous the prices dealers are being asked to pay at a wholesale level and that is being passed on at a resale level,” Mr Dever said. “Cars that we should be paying $5000 for, we are paying $7500 or more.”