Australia’s used car market is ‘going bananas’ with huge price increases after Covid
Used cars are going for big money due to a shortage of new models, but buyers should be wary of dodgy operators trying to take advantage of the market, auto experts revealed.
Used cars sold for a 65 percent higher price tag in the first quarter of 2022 than three years ago — and as much as 18 percent more than six months ago, new data from Moody’s Analytics shows.
For example, the Suzuki Jimny, a very popular small four-wheel drive car, has increased by about $20,000 in pre-owned value in less than two years, with listings that used to be $30,000 and now ask for $50,000.
James Ward, director of content at Drive, said the market was moving towards “bananas,” with sellers getting unbeatable prices and some sought-after models even rising in value.
The Suzuki Jimny (photo) is a model that will attract big asking prices in 2022
The Toyota Hi-Lux is a favorite of high-spending tradies, even on used models
“In many cases, you can sell an 18-month-old car for what you paid for it,” he said. 9News†
“We’ve never seen used cars that actually increase in value.”
Tradie favourite, the Toyota Hilux, is another model that commands high prices, with Dan Baxter of Ballarat saying he bought one in 2014 and sold it in February of this year for just $1,500 less with 225,000 miles on the odometer.
The surging used car market is being driven by long waiting lists for new shipments due to supply chain problems caused by the Covid crisis and the Russian invasion of Ukraine.
But this was exacerbated by manufacturers who slowed production in the course of pandemic lockdowns just as demand peaked – with consumers unable to spend their money on vacations or socializing, looking to upgrade or increase the size of their vehicle.
“Even for regular cars you have ridiculous waiting lists, waiting times of 12 to 18 months,” said Mr Ward.
He said those looking to switch cars and take advantage of the windfall should keep in mind that you’re also buying at a higher price and that you commit to what you want to buy first so you don’t run out.
But he added that for those who may have a second or third car that they don’t use, now is the best opportunity to sell.
Buyers are also warned about scammers who roll back odometers to make it look like a car has reduced mileage so they can fraudulently charge an even higher price.
NSW Fair Trade Minister Eleni Petinos said incidents of this type of scam are increasing.
Consumers are warned to beware of sellers who roll back the odometer with a Subaru XV sold with 400,000 miles wiped, according to NSW Fair Trading
Fair Trade Minister Eleni Petinos (pictured) outlined some of the ways consumers can protect themselves
NSW Fair Trading Investigators have handed out $112,200 in fines and 76 fines in 2021 and 2022 — a huge jump from 22 total fines in 2020 — so anyone considering scamming a potential buyer by tampering with the odometer needs to know that when you get caught, it costs you,’ said Mrs Petinos.
In one example researchers found, a salesperson shaved more than 400,000 miles off a 2012 Subaru XV, reducing the odometer from 470,000 miles to 52,709 miles.
The vehicle subsequently sold for $32,000, an increase of $11,000 from its original retail price.
In another example, a 2009 Toyota Hilux resold for $30,980, more than five times the retail price of $6,000, after the mileage was reduced by approximately 280,000 miles.
But Ms. Petinos said there are ways consumers can protect themselves.
“It’s important to see the vehicle’s registration papers and title deeds, as well as meeting the owner and seeing their identification,” she said.
“Have the vehicle checked by an authorized repairer and run a Personal Property Securities Register (PPSR) check or purchase a vehicle history check.”
If buyers suspect the odometer has been tampered with, they can report the issue on the Service NSW website (stock image)
Buyers should also get a receipt from the seller with the VIN and engine number and verify that their signature matches their ID.
She said most of the cases investigated by NSW Fair Trading were carried out by individuals without a motorcycle dealer’s license. The vehicles are often advertised on online sites such as Facebook Market Place and Gumtree under fictitious profiles.
Mr Ward revealed that it is a good move to also look for used cars that still have some warranty and include services.
He added that he expects prices to return to normal within 12 to 18 months.
Buyers can also report suspected odometer tampering on the Service NSW website.