It keeps getting cheaper to buy a used car in Australia, as prices continue their retreat towards pre-COVID levels.
The Moody’s Analytics Used-Vehicle Price Index continued its decline in June 2023. The data firm reports prices are 13 per cent lower than at their peak in May 2022, as new car supply improves.
Prices are still inflated compared to pre-COVID levels, however, with Moody’s reporting they remain 54 per cent higher.
With more new cars flowing into the country during the second half of 2023, and “discretionary” demand slowing due to inflation and rising interest rates, Moody’s Analytics is forecasting further price drops throughout the remainder of the year.
In keeping with Cox Automotive, Moody’s Analytics expects used electric car prices to drop faster than petrol and diesel prices because of lower fuel prices, cuts to the cost of new electric vehicles, and buyer concerns about battery degradation.
Also expected to drop faster than the broader market are ute prices.
“This is due to significant cuts in the production of passenger cars in recent years as supply-chain constraints saw manufacturers prioritise larger vehicles with higher profit margins,” Moody’s Analytics says in its most recent report, arguing passenger cars will hold their value longer as they remain in short supply.
Used ute prices skyrocketed during COVID-19, with vehicles such as the Toyota HiLux and Ford Ranger trading hands for more than the retail sticker of a new equivalent at the market’s peak.
Moody’s Analytics described October 2020 as the “best time to be selling a used car, truck, SUV or ute on record”.
