Used vehicle sales surge in Australia, driving down prices for buyers (2024)

FAQs

Used vehicle sales surge in Australia, driving down prices for buyers? ›

The number of used cars for sale in Australia continues to grow, pushing prices down and driving an increase in sales. Unlike the booming housing market, the used car market is turning in favour of buyers with higher stock volumes pushing asking prices lower, which in turn is driving an increase in sales.

Second-hand cars are now selling for 67 per cent of their original value, dropping from a high of 75 per cent. The drop in prices comes after a peak in July 2023, which saw more than 300,000 second-hand cars sold.

There was a slight uptick in used vehicle prices from December 2023 to January 2024, with used car prices up 0.06 per cent and used ute and SUV prices up by 1.4 per cent, but the firm nevertheless expects prices to continue dropping during the year.

Understandably, when there is a shortage of new cars and prices are high, consumers have turned to second-hand cars which are already in the country. However, this has led to a supply-demand imbalance, reducing the availability and increasing the cost of this once cheaper option.

At the end of 2023, the average price of a used car was $28,371, 4.4% less than the average a year earlier⁵. New and used car prices continued to fall in the first quarter of 2024. Industry experts predict that used car prices could decrease by as much as 14% on average by the end of 2024⁶.

There was also decline in prices on the traditional collectable cars which were second in the KFLII over 2022, but have dropped back to the fifth spot with price growth of five per cent.

The COVID era's supply chain disruptions, stimulus payments, bargain-basem*nt interest rates and fear of public transportation conspired to tank inventory, drive costs through the roof and slam the brakes on dealer incentives starting in early 2021.

Experts say that 2024 will be the best year to purchase a new car since 2019. As interest rates slowly drop throughout the remainder of the year, payments will become more manageable. Don't overlook manufacturer rate promotions, as they can save you thousands of dollars.

In all likelihood, what will happen to classic cars after 2030 instead is that they will become increasingly expensive to run as petrol and diesel usage dwindles and prices for combustion fuels skyrocket. That will make running a classic car even more of a luxury than it already is.

The average used car price in Australia in 2022 was $37,000. This is up by $10,000 from the record 2020 high. Despite this big hike due to inflation and supply chain issues, prices fell 2.1% in January 2023, the first drop since May 2020. Prices are expected to ease further (by at least 10%) during 2024.

Are cars cheaper in Australia or USA? ›

The comparison found that no matter if you're buying a luxury brand, say a Jaguar or a Rolls-Royce, or a standard passenger vehicle such as a Honda Civic, Aussies are coughing up up to 185.14% extra for vehicles compared to our American friends.

End of the financial year (EOFY)

The end of the financial year, which is 30 June in Australia, is a well-known time for car dealerships to push for sales targets, which can translate into significant savings for car buyers. Sales staff and dealerships often have quotas to meet by the end of the financial year.

The Total Sales Forecast

New-vehicle total sales for the first half of 2024 are projected to finish between 7,794,500 units and 7,857,700 units, a 0.4% to 1.2% increase from the first half of 2023 on a selling day adjusted basis. H1'24 has 154 selling days, two more than H1'23.

The auto loan rate forecast for 2024 suggests a cautiously optimistic outlook. While rates are not expected to plummet, there is potential for a modest decline as the year progresses, particularly if inflation continues to subside and the economy remains stable.

According to the most recent data from Statistics Canada, there were 128,193 cars and trucks sold in Canada in December 2023, which was higher than the pre-pandemic number of 116,466 in December 2019. As of February, the average price for a new vehicle in Canada was $66,979 and a used vehicle $38,451.

Used Cars Feel the Pinch

We're on the cusp of a shortage of used cars, with supply down 4% from January 2023. There are roughly 800,000 fewer used cars to choose from now, with an average list price of $28,859. That average price may be down 2.9%, but it's still 36% higher than what it was in January 2019.

Auto prices are cooling, but 'we're never going back to the old normal,' expert says. Here's what car shoppers can expect. Prices are beginning to come down from peak highs for both new and used cars, but we might never go back to pre-pandemic norms, experts say.

Cox Automotive expects U.S. sales growth to slow during the second half of the year to end 2024 at 15.7 million units, roughly a 1.3% increase compared to 2023.