The Australian new car market has re-written document books in three of the previous 4 months, as long-overdue deliveries begin to roll off the ships and into buyer driveways.
That is tied in to a marked improve in used car inventory on seller heaps, which ought to exert extra downward stress on costs.
In response to car information and re-marketing agency Cox Automotive Australia, the variety of used and demonstrator car listings at sellers in its database is up greater than 30 per cent in 2023 to this point, in addition to up 22.5 per cent over the identical level in 2022.
The Cox Automotive information isn’t the one data displaying value cooling within the second-hand market. Monetary intelligence firm Moody’s Analytics reported not too long ago general used car costs are 2.2 per cent decrease than July and 11.3 per cent decrease than a yr in the past.
The agency discovered used car costs are additionally 15.2 per cent decrease than their peak in Might 2022, nonetheless, they’re nonetheless 49 per cent increased than the pre-COVID stage in August 2019.
The sample suggests extra non-public consumers and fleets are taking supply of their overdue autos, and trading-in or wholesaling older inventory which enters the pre-owned market searching for its subsequent proprietor.
Cox Automotive’s Value Index, which tracks the value modifications of used autos over time, sat at 141.1 factors as of August 31. This implies the common value of used vehicles is 41.1 per cent better than the ‘base interval’ of December 2019 – simply earlier than COVID modified the market.
Whereas nonetheless inflated, this index is down round 5 per cent from its August 2022 excessive level, and down 4.2 per cent over this yr. The identical information additionally exhibits greater than 40 per cent of sellers lowered the value of a used car itemizing at the least as soon as, and by a median of seven.1 per cent.
One other factor the information exhibits us is later-model or newer used autos are promoting at comparatively much less inflated costs than older inventory, which stays in shorter provide and better demand as extra of the inhabitants tighten their belts as a result of ratcheting cost-of-living pressures.
Second-hand SUVs aged underneath two years are on common 19.7 per cent costlier than the identical types of auto had been simply earlier than COVID (119.7 on the value index), whereas these aged 2-4 years are nonetheless 31.1 per cent increased than pre COVID, these aged 5-7 years are 35.1 per cent costlier, and people aged 8-10 are on common 40.3 per cent costlier.
The identical patterns are evident on passenger autos and pickups too: the older the car, the upper its value index. The higher worth is to be discovered on later-model used vehicles the place’s there’s extra provide and fewer demand.
Whereas not as public dealing with, the identical Cox Automotive Australia information additionally appears to be like on the firm’s Manheim wholesale auctions, which promote numerous former company, authorities and rental fleet autos to sellers who use them to populate their used automotive heaps.
Manheim says it recorded quantity development in August of 15.6 per cent over July and 29.4 per cent year-on-year, for its finest end result since March 2021. Its wholesale value index is down 12.7 per cent from the Might 2022 peak.
So whereas wholesale used car costs stay excessive, they’re coming down which suggests sellers must be charging much less for them in flip.
When it comes to used EVs, resale values stay a priority as a result of quite a lot of components together with purchaser scepticism over battery well being, authorities rebates and tax breaks that concentrate on new autos, and early adopter choice for the newest know-how in a fast-iterating phase.
The pattern measurement of second-hand EVs stays small, given uptake on the brand new aspect solely spiked in 2021 and these autos are but to trickle into the pre-owned market at scale. Simply 0.5 per cent of dealer-used listings within the Cox Automotive information are an EV or PHEV.
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