Used car prices saw record rise in September due to short supplies

Used car listings are drying up as demand soars

Used car prices saw record rise in September due to short supplies

If you're considering selling your car, now might be the time to pull the trigger.

Listings for used cars in Australia have recorded a marked year-on-year decline, while prices are heading in the opposite direction, breaking records thanks to a fall in supply across the board.

According to recent data from JP Morgan, overall listings at Carsales for the second half of 2020 were down 20.5 per cent year-on-year, with private listings in particular dropping 45.7 per cent in the second half of 2020 compared to the same period in 2019.

Similarly, dealer listings decreased by 7.3 per cent compared with 2019 and new and demo listings also declined by almost 25 per cent.

Why? Because we’re currently in the midst of a global car shortage – both of the new and used variety.

Declining turnover

“New vehicles supplies have remained low because of production and supply chain slowdowns that have occurred worldwide due to the pandemic,” explains Michael Brisson, Senior Economist at Moody’s Analytics data firm.

“Additionally, used vehicle supplies have been constrained due to leases that were extended and less kilometres driven by fleet companies leading to declined need for turnover in fleet sales.

“Not to mention, a lack of trade-ins that have occurred because of lower new vehicle sales.”

Brendon Green, General Manager of Motor Vehicles at Pickles, says the automotive auctions company has witnessed a notable fall in listings in 2020 which has been almost single handedly driven by the fleet management and finance repossession segments.

“Less than 10 per cent of our inventory comes from private sellers, the majority comes government fleers and financiers and turnover in both those segments has been down due to social distancing and a lack of new vehicles.”

Mr Green says stock remains up to 35 per cent down on 2020 levels but, as a result, sale prices are up almost 30 per cent on pre-COVID levels.

“If I was trying to sell my car privately I would absolutely be trying to do it as quickly as I could,” he suggests.

“I suspect early parts of 2021 will be strong, but then we will see a softening in mid-2021 from the dizzying heights we’re at at the moment.”

To be precise, “dizzying heights” means used-car prices that are 32 per cent higher than they were in 2019 and climbing, according to Moody’s Analytics data.

“People looking to sell their cars now will be pleasantly surprised compared to if they had looked to sell in December of 2019,” Mr Brisson of Moody’s Analytics says.

“There is a significant premium compared to pre-recession prices that has made its way to the consumer market.”

Less traditional listings surge

While traditional used-car sales avenues are witnessing a decline in listings, less traditional outlets Gumtree have witnessed a rise – possibly driven by people looking to offload cars quickly or avoid human contact altogether.

For 12 weeks straight, JP Morgan has recorded a rise in the number of automotive listings on Gumtree.

In fact, recent data showed total automotive listings on Gumtree were equivalent to almost 70 per cent of Carsales’ overall listings, while private listings on Gumtree were 215 per cent of Carsales’ private listings.

Mr Green from Pickles says he has also seen a surge in the uptake for the company’s DIY Inspect app, which allows private sellers to have their car valued and collected via an entirely contactless process.

“We’ve had over 20,000 downloads on the app since it launched 18 months ago and from May-June 2020 onwards we saw an escalation in this uptake – and we convert roughly 50 per cent of the offers we make,” Mr Green explains.

Utes and holiday SUVs in hot demand

Regardless of how you’re selling them, it’s the utes that are showing the greatest growth.

“Light commercial vehicles are in high demand right now and there’s been a shortage of them in that new car space – a lot of tradies are still tapping into the instant asset write-off space which has been really popular,” Mr Green explains.

Meanwhile, CJ Jayasinghe, CEO of Perth-based used car wholesaler Westside Auto, says aspiring holiday-makers are also pushing up prices on family SUVs.

“As COVID hit we saw companies not turn over their vehicles as frequently due to the uncertainty that existed, which dried up a lot of that stock from March to around September,” Mr Jayasinghe says.

“[But also during this period,] the appetite for upgrading personal cars to more rugged adventurous vehicles Toyota LandCruisers started to occur because Australians wanted to explore their own backyard more.

“This meant our stock was predominantly higher spec’d vehicles and resulted in our average sale price being in the mid $30,000s [it’s typically around mid to high-$20,000s].

“The market is starting to normalise now and we have 2112 vehicles in stock as of today, which is getting close to pre-COVID-19 levels.”

MORE: Cheap cars on : Scams prompt new warnings
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Источник: https://www.caradvice.com.au/907501/used-car-listings-are-drying-up-as-demand-soars/

Used Car Prices Increase Amid COVID-19

Used car prices saw record rise in September due to short supplies

You don’t need to look far to realize that used car prices have been incredibly volatile over the past few months. Amidst the ongoing global COVID-19 pandemic, many aspects of life have changed, and the automotive industry has been no exception. Over the past few months we’ve seen supply shortages, once in a lifetime manufacturer incentive deals, and used car prices that defy reality.

It goes without saying that 2020 will certainly be a year we never forget for myriad reasons.

To better understand the true impacts the past few months have had on used car prices, the team over at iSeeCars.com, led by Julie Blackley, conducted a research study on used car price changes. Their findings? Both surprising and telling. A lot of vehicles have seen their values increase, while a select few have actually gone down in price (who would have guessed).

We highly recommend you take a look at the full report here, but in the meantime, we’ve distilled some of our favorite insights for you. Without further ado, let’s dive in.

Used car prices increased 4.1% in August

Without a doubt, the biggest headline to come the iSeeCars report is the fact that used car prices increased a little more than 4% in August from the month before. Year over year we saw an increase in used car sales for the month of August of 4% as well.

That means that 4% more used cars were sold in August of 2020 than in August of 2019, and on average car buyers paid 4% more in August of 2020 than they would have in July of 2020. As used car prices increased, so did car buyer’s appetite to purchase them, evidently.

At the root of this dynamic is supply and demand. Data from Cox Automotive’s Manheim Auction unit suggests that dealers currently have a 33 days’ supply of used cars on their lot right now. A year ago, this number stood at 43. With less supply, we have seen prices increase on both the retail and wholesale side of the industry.

Unprecedentedly we heard from the CEOs of multiple publicly traded automotive retailers saying that they could not find enough supply to meet customer demand.

It’s clear why used car prices increased by 4% in August when you take into consideration all of these factors.

Some used cars saw small price decreases

August was not all bad news for used car prices, there were a few vehicles that decreased in price from July to August. If you were (or are) in the market for a subcompact vehicle, you should have seen prices decline.

1Chevrolet Sonic$10,463-$243-2.3%
2GMC Yukon XL$42,317-$811-1.9%
3Chevrolet Spark$9,839-$185-1.8%
4Ford Fusion Energi$16,844-$313-1.8%
5Ford Ecosport$17,409-$199-1.1%
6Mazda Mazda6$16,704-$188-1.1%
7Porsche 911$132,704-$1,453-1.1%
8Hyundai Elantra GT$13,906-$150-1.1%
9Lincoln MKZ$22,513-$241-1.1%
10Nissan Altima$15,339-$124-0.8%

SUVs and Pickups saw the largest increases in price

Unsurprisingly, SUVs and pickups led the charge in increased prices for the month of August. In total, 14 different SUVs experienced 5% increases in their average used car retail price from July to August.

1Land Rover Range Rover Sport$51,502$4,2268.9%
2Lexus RX 350$35,055$2,7078.4%
3Land Rover Discovery Sport$28,839$2,1217.9%
4Volvo XC60$29,011$2,0427.6%
5Land Rover Range Rover Evoque$29,866$1,9617.0%
6Porsche Macan$46,148$2,8816.7%
7Porsche Cayenne$51,856$3,1986.6%
8Lincoln Navigator$47,990$2,9186.5%
9Volkswagen Tiguan$19,679$1,1296.1%
10BMW X3$29,021$1,6626.1%

6 different pickup trucks experienced more than a 5% increase in price as well.

If you’re thinking about buying or selling your car, you might enjoy this article if you haven’t read it already: The Car Buyer’s Glossary of Terms, Lingo, and Jargon

1Nissan Titan$32,651$1,9246.3%
2Ford F-150$34,452$1,9235.9%
3Toyota Tundra$36,541$2,0115.8%
4Toyota Tacoma$31,477$1,6735.6%
5Chevrolet Silverado 1500$32,609$1,6565.3%
6Ram Pickup 1500$31,079$1,5525.3%

As demand for SUVs and pickup trucks continues to stay high, prices on the new and used car market for either type of vehicle are elevated. A recent Edmunds study on 3 year vehicle retention even showed some pickup trucks retaining 75% of their value after 3 years of ownership. Used SUVs and pickups are expensive relative to sedan, coupe, and other peers.

Wholesale used car prices have started to decline

If you’re contemplating purchasing a used car in the not too distant future, have no fear, there is light at the end of the tunnel. Over the past few weeks we have seen wholesale used car prices begin to decline off of their unsustainable record highs.

For the week ending August 23rd, Cox Automotive saw wholesale used car prices decline .7%, the first decline in wholesale used car prices in many months. It appears the peak of used car prices has been reached.

Interestingly, it is expected that used car prices will swing drastically in the other direction (become cheap) in the not too distant future. Many factors, such as forbearance, repossessions, rental company de-fleeting should increase used car supply considerably as we enter into 2021.

Increased demand for used cars is also expected to continue, as more consumers want personal vehicles for transportation amidst a COVID-19 world.

However, with the end of government benefits (unemployment and stimulus), it’s hard to gauge what buying power these consumers will have, and if their demand will be enough to prop up used car prices.

Источник: https://yourautoadvocate.com/guides/used-car-prices/

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