For example older used cars are seeing much higher market price support than newer used cars or demos, SUVs and utes have been on the lower side of the price increases and EVs and hybrids have basically missed out (based on lowish numbers in the market so far).
In terms of the overall market, Cox Automotive Australia’s ‘Retail and Wholesale Used Vehicle Market Insights’ for July shows used-car prices have come down from the record highs of mid-2022.
The overall index, which started at 100 in December 2019, is now 141.6,but that is down 1 per cent from June 2023 and 4 per cent lower than the used-car price peak of August 2022.
Cox Automotive Australia confirms that used vehicles are fetching prices “substantially higher” than they were before the COVID-19 pandemic and associated market supply interruptions brought about record price inflation in the pre-owned market.
Cox Automotive Australia said that the current 141.6 index marker represented a huge 41.6 per cent price increase on average over this period.
But within the used car market there were varying price performers, with, for the most part, the greatest “price increases over the past few years on older used vehicles rather than newer, lower-mileage ones,” the report said.
Cox Automotive Australia National Retail – Dealer Used Car Prices Index (2019 – 2023)
“Used and demo passenger vehicles aged two years or younger ended July priced 29.3 per cent more expensive on the price index than they were just before COVID.
“By contrast, those aged two years to four years remain 44.6 per cent higher in price while those aged five years to seven years are 53.2 per cent higher in price.
“Those aged eight years to 10 years are 69 per cent higher in price.”
But age of the vehicle is not the only factor playing a role in holding the highest prices.
Cox noted that there is a similar pattern across varying vehicle types.
SUVs under two years of age, for example, finished July some 20 per cent higher on the price index than applied to the same age bracket back in December 2019, the report said.
“That compared to 32.6 per cent higher for those aged two years to four years; 35.9 per cent higher for those aged five years to seven years; and 40.8 per cent for those aged eight years to 10 years.”
For utes, the price index for those under two years of age ended July at 128.5, meaning a 28.5 per cent average price increase over the same sorts of vehicles before COVID.
Manheim Wholesale – Used Car Prices Index (2019 – 2023)
By contrast, utes aged two years to four years were on average 35.7 per cent higher in price; those aged five to seven years were 44.7 per cent higher in price; and those aged eight to 10 years were 56.3 per cent higher, Cox’s report stated.
“Across the board we see that it’s the older stock commanding much greater prices than they were before COVID.
“With improved supply of new vehicles filtering through, we’d expect to see reduced demand for late model used cars, so expect this trend to continue.”
The trend is being seen in the used EV and used PHEV market. But Cox warned that these markets tended to be “quite volatile” because of the smaller sample size of used models in dealer inventories.
“As we have been seeing for some time, the price indexes for these vehicles across age brackets are not holding up as well as combustion-engine vehicles and hybrids.
“The respective price indexes for EVs and PHEVs are 99.4 (aged two years or less); 115.4 (aged two to four years); 108 (aged five to seven); and 112 (aged eight to 10).
“As you can see, the pattern where older vehicles are relatively more expensive than before COVID likewise applies to lower tailpipe emissions vehicles too, just at a lower level.
“On that note, resale values of all second-hand electric vehicles and plug-in hybrids fell at a faster rate (3.1 per cent MoM) than the overall car parc (1 per cent MoM).”
Cox’s report also showed that the overall number of active dealer used listings grew 6.8 per cent MoM and 25.2 per cent YoY.
Cox Automotive Australia National Retail – Dealer Used Car Prices Index. Top 5 sold used vehicles (July 2023)
This drove an overall 3.8 per cent increase in Market Days Supply (MDS) between June and July, which sits at 63 days across age brackets and vehicle types.”
Cox said that EVs and PHEVs continue to defy market trends with MDS figures of 76 days’ supply for those aged under two years, 77 days for those aged two to four years and 87 days for those aged five to seven years.
“Any number higher than 70 days means the market is carrying too much stock, but we will add the caveat that the sample size (of electric vehicles) is still small,” it said.
“The number of used vehicles sold was down 8.9 per cent over a bumper June result. But year-to-date (YTD) the number of second-hand vehicles sold is still up 15.8 per cent over 2022 at the same point in time.
“We’ve seen dealers moving stock faster, with the Average Days to Sell (41 days) metric down 1.1 per cent MoM.”
Cox said that the Top-5 selling passenger used nameplates across July were the Hyundai i30, Toyota Corolla, Mazda 3, Holden Commodore, and Kia Cerato.
The Top-5 SUVs were the Toyota RAV4, Nissan X-Trail, Mitsubishi Outlander, Mazda CX-5, and Toyota Prado.
Leading the used ute sales race were the Ford Ranger and Toyota HiLux, which were also the two top-selling used vehicles of any type – the story is the same in the new market – ahead of the Mitsubishi Triton, Nissan Navara, and Holden Colorado.
The report said that dealers should factor in the lower number of new cars sold into the Australian market between the COVID years of 2020 and 2022 which would see a shortage of 2020 to 2022 models working its way through the market over the coming years.
Read more:
Cox: Market days supply falling
By Neil Dowling
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