Sky-high used car prices could keep Aussies in the hips for a long time to come, experts say.
Used cars cost as much as 65 percent more than pre-Covid levels, new data has revealed.
Statistics from financial intelligence group Moody Analytics also show used car prices are up 18 percent from what they were at the end of 2021, as the Covid-19 pandemic’s pandemic lull in manufacturing continues to hit the hips.
Drive Magazine’s content director James Ward told 9 News that market conditions for used cars were unprecedented.
‘We’ve never seen anything like it… it’s bananas,’ said Mr Ward.
‘Even on regular cars you have ridiculous waiting lists, waiting times of 12 to 18 months.
“Seeing used cars increase in value is also something we’ve never seen before.
“In many cases, you can sell an 18-month-old car for what you paid for it.”
Victorian man Dan Baxter told 9 News that he sold his ute on Facebook Marketplace — a popular platform for selling used items — for just $1500 less than what he bought it for eight years ago, despite another 35,000 miles on the clock. .
“I bought the 2008 Toyota HiLux in 2014 for $22,000 with 170,000 miles,” he explained.
“I sold it in February 2022 for $20,500 with 225,000 miles.”
Mr Ward called for caution as the car market continues to warm, with experts expecting the production backlog to clear within the next 18 months.
“With used cars, we see huge differences between what is the kind of value you would expect to pay and what people are asking for,” he said.
“Drivers have to be very careful not to pay more for a car than they should be, especially when interest rates are rising.
“Because if the market corrects, you’re going to be in a really bad shape.”
“Don’t pay too much”
“If you want to buy a car that feels expensive for what it is, don’t do it. †
Mr Ward hopes that rate hikes will limit motorists’ borrowing power and lead to reduced demand as manufacturers catch up, pushing prices down over the next year and a half.
Moody’s Analytics predicts that prices will remain high in the near term.