THE trade in used cars in Australia has never been skewed more in favour of buyers than sellers.
The bulk of cars changing hands through dealers, auctions and private sellers are older and have more kilometres on the clock than they did 10 years ago.
So it is no surprise prices of some used cars have plunged as buyers seek better value in today’s saturated market.
Most days more than 500,000 vehicles are for sale online. With only about 3 million used cars changing hands each year, it’s easy to see why most sellers wait months to find a buyer for their unwanted car unless they are prepared to take a huge haircut on price.
But demand for late model, fully serviced and well-presented vehicles with low kilometres is strong.
Quick sellers include:
- Vehicles that are five years old or less.
- Light commercial vehicles.
- Vehicles with automatic transmission.
- Used vehicles that carry residual warranties.
Slow sellers include:
- Vehicles plated between 2004 and 2007.
- Compact cars.
- Mid-sized and large sedans and wagons.
- Luxury cars and some SUVs.
- Cars located away from major metropolitan areas.
Stats released by one of Australia’s largest auction houses this year show the sale of quality, late model utes and vans are fetching the best prices, while prices in all other categories are trending down.
In the US (Australian data is not available), the sweet spot for buyers of used vehicles is between $16,000 and $19,000.
The same trends are emerging in overseas markets, where the average age of the overall car fleet is increasing, as is the demand for used cars aged up to five years old.
In Australia, this is unlikely to change in the next five years as the demise of local production pushes new car prices up thanks to the falling value of the Australian dollar and our reliance on imported vehicles.
With new car sales set to grow only 5% a year until 2019, it could take years to reduce the shortage of quality 0-5-year-old vehicles available to buy.
Car rental companies have identified that demand is growing for these vehicles, selling their old fleet sooner, with fewer kilometres on the clock to cash-in on higher prices in this category.
But government departments and businesses have been slower to take advantage of price increases in this segment.
Instead, they are keeping their cars longer and dragging down the overall average price of used cars sold at auction in Australia.
What’s in this data for you?
Cars that are 0-5 years old, have full service histories, are presented well and feature automatic transmission are in hot demand.
Upgrading to a newer model before they lose their appeal will save you plenty of money at the change-over.
AreYouSelling.com.au can complete your sale within 24 hours for any cars that meet our requirements, regardless of where you are located and what you have to sell, so long as it was built in 2002 or later and has travelled less than 180,000km.