Used vehicle prices across Australia have continued to rise throughout the second quarter of 2021.

Despite the monthly growth rate slowing, price levels have remained well above expectations because of the lack of vehicles on the market.

According to the Datium insights – Moody’s Analytics Used Vehicle Price Index, the cost of a used vehicle is 34 per cent more expensive than at this time last year, and 10 per cent more expensive than at the start of 2021.

A shortage of electronic semiconductor chips has decreased the number of vehicles shipped into the country, driving up the price of any vehicle people are willing to let go of. These supply issues continue to put upward pressure on both new and used vehicle prices.

Vehicle demand has remained strong as a result of the rapid economic recovery Australia was able to achieve coming out of the pandemic, with a record rate of new vehicles recorded across April and May. However, recent outbreaks of COVID-19 variants and subsequent lockdowns have cooled consumers’ outlooks.

Heading into the second half of 2021 is expected that the worst of the stock shortages is in the past. This is evidenced by the rise in U.S. auto production after steadily falling throughout the year.

“Still, a surge in available chips, and thus new vehicles, is not expected,” the report writes.

“Rather, a slow and steadily increasing stream of semi-conductors will begin to catch up with demand from manufacturers.”

The report predicts that prices will remain elevated for the remainder of 2021, compared with previous years, as the supply of vehicles returns and the market stabilizes.

Source: Moody’s Analytics

20 July 2021