“We’ve sold everything,” he told GoAutoNews Premium.
“If we had 100 cars this month, we’d sell those as well. Customers are coming through saying ‘I’ll take that, and that’. We haven’t the time to replenish stock.”
He is hardly alone. All around Australia used car demand skyrocketed in June and prices leapt 10 per cent – and more – as eager buyers sought commercial vehicles to maximise the federal government’s asset tax write-off extension.
The surge in demand will lead to most dealers reporting a record June for used cars and strong new-car sales and stating that the asset change was just what the market needed to break out of the pandemic malaise.
Hopper Motor Group director Paul O’Halloran told GoAutoNews Premium: “We will have an all-time record delivery month for used cars in June.”
“At the moment, good quality late-model used cars are worth very, very good money with strong buyer interest.
“Certainly most other dealers I talk to have a similar experience.”
“Demand for new cars is the same. We have strong months in Hyundai and Jeep have been great.
“With our Isuzu Ute store, we can’t get cab-chassis utes at the moment to meet the inquiry rate.”
“Now I think supply will be a problem. I think July and certainly August will show tight deliveries.”
Western Ford dealer principal and chair of the Victorian Automobile Dealers Association, Sid Cetindag, said prices at the moment were completely out of the norm.
“Currently, vehicles that we would pay $34,000 at the auctions, we now have to pay $40,000,” he said.
“That’s the same cars, same mileage, same company, same everything. That’s gone up in just a month.
“People want the asset write-off so it’s commercial vehicles that are in demand. General used cars are popular but not as brisk as the commercials.”
Mr Cetindag believed that June was the peak of the used and new-car bonanza.
“I think in July and August, the used-car market will come back. Then the prices will come back,” he said.
“New car stock will normalise by August. The yard at the moment looks barren. We have cars coming for July but I estimate that 80 per cent of the month is already sold.
“In August, I think there will be very little stock available but in September, new cars will get back to normal.
“The smart dealers will go through the next quarter as lean as possible because most people will wait until the last quarter before they buy up again for the following year’s asset write off.”
He said there were no sales planned by Ford for July and believes other manufacturers are the same.
“They don’t have the stock and the supply will drop to 30 days from 45 days,” he said.
“All manufacturers are in the same boat. In a normal year, we would have sold 100 new cars in June. This year in June, we’ll sell 300.
“The inquiry rate is very strong. We have moved 60 new cars in three days and we’ve been working Sundays.
“Ford, being predominantly commercial, has been hit by the increase in sales. We have RAM as well and it’s having a record month, so right across the commercial board there’s record sales.
“Passenger cars haven’t enjoyed this as much as commercials.
“It’s definitely not normal and the market has been brought forward because of the COVID-19 and the asset write-off extension.
“The write-off change has certainly stimulated the market and we’ll have to talk to the government about this, maybe looking at it being a permanent thing.
“The government has done a fantastic job of stimulating the market and for the future, it could be applied to the whole year.”
The situation is the same for auction houses. Manheim goes against the belief that prices will soften by predicting that vehicle prices are destined to increase to above average levels in the long run.
It blames constrained supply brought on by the shuttering of new-car factories and assembly lines around the world.
“Historically, used car prices have risen when the sale of new cars has fallen in the years following the global financial crisis,” said Matt McAuley, head of communications for Manheim Australia’s parent company Cox Automotive Australia.
“Anecdotally we are hearing many of our dealer customers reporting record months for used car sales and the wholesale market has also been much more vibrant in May,” he said.
“Public buyers have also found their way into our online sales channels and have been very comfortable buying online whereas in the past they would have needed to visit a Manheim site in order to buy a used car at auction.”
Manheim’s website statistics add to the story of increasing dealer and consumer activity.
Mr McAuley said that unique visitors to the Manheim website was up 24.3 per cent in May compared to April and even up 11.5 per cent on May 2019.
He said it was repeated with website sessions, which were up more than 25 per cent on April and May 2019 and actual page views were up a massive 53 per cent compared to May 2019.
“Our auctioneers reported a much more positive sentiment throughout May compared to the last few months,” he said.
“They are seeing dealers pick up on the rising consumer demand and participating strongly in our sales to make sure they have the inventory to take advantage of buyers returning to the market.”
By Neil Dowling