The pandemic has brought with it a host of problems for the automotive market, one of which is the soaring prices of second-hand cars.
Between people shunning public transport for safety reasons, shifting of city dwellers to regional areas because of newly implemented remote work setup, and delayed deliveries of new car stock, people have turned to used cars.
This has caused used car prices to skyrocket between 30 and 40 percent compared to pre-pandemic levels. According to Carsales.com, the average cost of used cars today hover at around $35,000, compared to pre-pandemic range of $20,000s.
CEO Cameron McIntyre believes that prices are likely to remain high this year saying, “My view is that they’ll be sustained at a high level for some time…the majority of this year”.
Motor Trades Association of Australia CEO Richard Dudley says this is caused by different problems across multiple fronts.
“It is the semi-conductor issue, it’s the delicate nature of the supply chains to the auto industry,” he told Ross and Russel.
“The lack of containers whereby parts can go from where they’re manufactured to the place of assembly of the motor vehicle.
“All of those are contributing to ongoing supply problems – anywhere between six and 12 months on some models – and that’s flowing through to people saying ‘Nope, can’t wait. I’ll go and get a used car’.”
Meanwhile, Australian Dealers Association chief James Voortman is hopeful that once the semi-conductor shortage starts to improve this year, the price of used cars will follow suit.
“At the moment we’re getting told by manufacturers around the world, we’re hopeful the semiconductor shortage will start to improve by the middle of this year.”
