Why YOU will be forking out much more for a USED CAR as prices soar by an eyewatering 60%: ‘It’s absolutely nuts’
- The global supply chain crunch is affecting new car shipments with long waits
- Buyers are turning to the used car market with prices soaring in recent months
- Tens of thousands of cars were also damaged in floods, pushing up demand
Australians are paying extravagant cash for used cars, up to tens of thousands of dollars more than new model prices in some cases, because of global shortages.
Wait times for delivery of new cars have skyrocketed in the last two years and, when combined with thousands of cars being damaged in recent floods, the scarcity has created a surge in demand.
The long delivery waits are courtesy of a global supply chain crunch caused by the Covid pandemic, which has affected car components such as microchips, but also shipments of the completed cars themselves.
Those purchasing a 2022 Land Rover Defender are in for shipment delays of close to a year, making the model nearly out of date when it arrives.
The Land Rover Defender has a shipment delay of 357 days making it one of the longest waits for all new cars (pictured)
A Toyota RAV4 is not far behind with a 293 days wait period, while an Isuzu MU-X takes 291 days to be delivered, according to PriceMyCar.
Those who are in the market to buy and don’t want to wait are shelling out big bucks to secure their car of choice.
NEW CAR SHIPMENT DELAYS
Land Rover Defender: 357 days
Toyota RAV4: 293 days
Isuzu MU-X: 291 days
Volkswagen Passat: 274 days
Ford: 36 per cent spike
RAM: 28 per cent spike
Mitsubishi: 15 per cent spike
MINI: 13 per cent spike
Australia most popular car the Toyota Hi-Lux, a favourite of cashed-up tradies, has seen a price surge for second-hand models of 59.9 per cent in the five months from January to May this year.
The Carsales data also shows that the popular Toyota Landcruiser has jumped in value by 49 per cent in the same period, while the Holden Commodore went up 41.1 per cent.
Cars were also being advertised for a 20 per cent shorter period before being snapped up than what they were a year ago.
A spokesperson for the online car marketplace said prices have surged for most models in the last two years in an upward trend that looks set to continue, turning on its head the long-held rule that cars always depreciate in value.
‘I know a guy who just bought a Landcruiser, paid $150,000 and a month later he was offered $175,000 for it,’ Queensland car broker Bob Aldons told The Courier Mail.
‘It’s absolutely nuts… There’s very little negotiation going on and sellers are getting a lot more than what they paid for it just two years ago.’
He said cars with tens of thousands of kilometres on the road were drawing a substantially bigger price than never-driven models because there is no wait period.
Mr Aldons added the caveat that only cars ‘in good nick’ were appreciating in value and that ‘a bomb is a bomb’.
Mike Claytons who runs Claytons Towing on the Sunshine Coast said auction prices for impounded vehicles have jumped by 25 per cent.
He said the market has gone ‘stupid’ with an 18-month wait for new trucks he could use in his business.
Tradie favourite the Toyota Hi-Lux has seen an almost 60 per cent surge in price for second-hand models (pictured)
Moody’s Analytics and Datium Insights also confirms the skyrocketing used car market with their data showing a 37 per cent rise in the average second-hand vehicle price since 2020.
‘The global automotive industry continues to be plagued by a shortage of microprocessor units and shipping delays,’ FCAI Chief Executive Tony Weber said.
‘This issue is not unique to Australia. Car makers continue to report high demand across dealer showrooms and online marketplaces.’
‘Pandemic interruptions continue to impact manufacturing and conflict in Ukraine has disrupted vehicle component supply.’
‘Monthly sales figures are also dependent on shipping arrivals which continue to be uncertain.’
‘We do not expect supply chains to stabilise until these issues are resolved.’
The fall in new model sales in May left the new car market for the first five months of 2022 down 4.1 per cent at 437,884.
Toyota was the top-selling company last month with 22,813 ahead of Kia on 7307, Hyundai on 7063, and Mazda on 6474.
The Holden Commodore has seen a 40 per cent price surge for pre-owned models (pictured)