USED car prices across Australia are continuing their upward run with the latest data now suggesting that since the COVID-19 pandemic began impacting the supply of cars, the average prices being achieved by dealers for used cars has increased by $8000.

GoAutoNews Premium reported an increase of $6000 in April, but in just two months the number has increased by another $2000.

Cox Automotive Australia’s data solutions division has confirmed that the continuing demand from buyers in the face of the shortage of new and used cars for sale had driven up used-car asking prices when delisted from dealers’ websites to an average of more than $31,500.

The data tracks the prices being asked at the time vehicles are actually delisted (because they have been sold) which is an indicator of the final transaction price achieved for that vehicle.

As reported in April, data released by Cox’s used-car intelligence tool, AutoRadar, the average prices dealers were asking at the time they delisted their used vehicles were around $23,000 to $24,000 throughout 2019 and in Q1 2020.

But by September 2020, the average price of used vehicles at delisting rose to $26,500, hit $27,700 in November, $28,000 in January 2021 and passed about $29,500 in April. This number  jumped another $1000 in May and reached more than $31,500 in June.

The prices being asked by dealers at the time of first listing their used cars has followed a similar pattern.

The AutoRadar data shows that throughout 2019 the average prices dealers were asking when they first listed their used vehicles for sale online were around $25,500.

By Q1 2020 the average asking prices had firmed to around $26,000 but by September 2020 they had risen to an average of $28,000, hit $29,000 in November, $30,000 in January 2021 and passed $31,000 in April. The number now sits at more than $32,000.

Another indicator residing within the AutoRadar data reveals the intensity of demand for used cars as well as the success of dealers in generating strong margins. This is a calculation of the difference between the average asking price when cars were listed and the average asking price when they were removed from sale.

The number identifies the level of discounting dealers were having to apply in that month in order to close their used-vehicle sales.

Throughout 2019 dealers were basically discounting by an average of around $2000. When COVID hit in 2020, and dealers set about trimming their used-car stock as they battened down the hatches; dealers were prepared to take less margin to make the sale.

That was revealed in the data which showed that by May 2020, dealers were accepting nearly $4000 less at delisting than they were asking for when the cars were listed.

But that number has been dropping with dealers only shedding $1200 to $1500 to complete their sales over the past 12 months and in June this year dealers only dropped on average just over $500.

Cox Automotive Australia Data Solutions CEO Michael Sommerton told GoAutoNews Premium: “What is pleasing for us is that we have access to Australia’s largest database of dealer used vehicles where our database for dealer used cars is, on average, 32 per cent greater in total units than that of our closest competitor as measured since September 2020.

“The market is certainly robust and the access to such an extensive database as we have shows that used-car selling rates are at the same level they were in the first quarter of 2019 and right on average of vehicles sold since January 2019 to date.”

He said the pent-up demand experienced because of the listing of COVID restrictions in most of Australia in 2020 was “still having a residual effect on used car prices; however we expect this to continue to ease throughout the remainder of this year”.

By John Mellor