Used vehicle prices are up 25 per cent in the last 12 months following a record breaking period of growth that included significant downturn during the worst of the COVID-19 pandemic.

Prices hit a record high for the third month in a row in August on the back of a 7 percent increase, according to the latest figures Datium Insights – Moody’s Analytics Price Index.

Once again it was consumers reservations around public transport during the pandemic that led the growth. With public transportations levels around Australia still lagging at approximately 60 per cent lower than pre-COVID levels, it is evident that commuters remain cautious about mass transit.

The market is also still suffering from supply constraints that continue to push prices of available stock higher, stemming from slow new car sales, lease extensions through the pandemic and banks decision to continue to forgo repossessions.

Unsurprisingly, SUVs and utes are leading the way when it comes to used vehicle price growth.

Australia’s favourite new car segment, SUVs have proven to be just as popular among used vehicle buyers. Between the SUV and light truck segments, prices have increased by 32 per cent over the past year. Comparatively, the passenger car market witnessed a 23 per cent rise over the same period.

Anticipating the growth of the market in the coming month, Moody’s Analytics data points to prices stalling in the short term. Ute prices, in particular, are expected to begin to decline as fuel prices continue to increase following lows earlier in the year.

More sellers are also expected to take advantage of record prices to sell vehicles, leading to more supply and lower prices.

However, with continued record growth over the last three months, it is difficult to predict when prices will begin to decline, with many external factors playing a part in adding to the volatility of the market.

Source: Moody’s Analytics

17 September 2020