If you’ve looked at the prices of second-hand cars in Australia over the past couple of years, you will have noticed a sharp increase. But used car prices are stablising and could fall this year.
This article explains everything you need to know about second-hand/used car prices, including answers to FAQs.
Why are used car prices so high?
The major reason why the prices of used cars surged over the past couple of years is the shortage of new vehicles available. This shortage was caused by COVID-19 manufacturing shutdowns for extended periods, as well as the global semiconductor shortage.
New vehicle waiting times of six months or more both in Australia and around the world haven’t been uncommon over the past couple of years. The new car supply delay has increased demand for used cars, and therefore prices.
In addition, the prices of some iconic Australian-made Fords and Holdens have increased in recent years due to the closure of the local car manufacturing industry. It means that Australian-made vehicles bought prior to the closure will increasingly become collector’s items.
Australia’s high inflation rate is another contributing factor to rising prices of all goods and services, including both used and new cars.
Will used car prices come down?
Car manufacturer shutdowns due to COVID-19 appear to be well and truly behind us (at last), but the global semiconductor shortage is still having an effect. However, some analysts are predicting that the worst is behind us and that supply levels will gradually get back to normal levels over the next 1 to 3 years.
Used car prices have actually been falling since mid-2022, however they remain significantly higher than they were pre COVID-19. In fact, 55% more on average.
Other used car FAQs
Can you get finance for a used car?
Yes, but not all lenders will approve a used car finance application. Our team of experienced car finance brokers at National Loans can advise you on the lenders that do.
There may be restrictions on the age of the used vehicle you can buy on finance. These restrictions vary among lenders. Once again, our team can provide you with the right advice to save you the time and hassle of researching the car finance market yourself.
We work for car buyers, not car sellers or dealers, and we work with more than 50 lenders in the market.
Should you buy a used car privately or from a dealer?
There’s no right or wrong answer to this question. There are pros and cons of both methods. For example, if you buy privately, you can potentially get a better price because you “cut out the middleman”.
On the flip side, you may get a limited used car warranty if you buy from a dealer, but you won’t if you buy privately. You may also be able to trade your old vehicle in with a dealer, but you won’t if you buy privately.
Should you get used car finance from a dealer?
No, you shouldn’t let yourself get talked into new or used car finance by a dealer. Dealer-arranged finance terms and conditions always favour the dealer more than the buyer.
You’re much better off arranging car finance through a broker like one of our team at National Loans. We have access to multiple lenders in the market and can help you to find a better deal.
Where can you check the market prices of used cars?
Redbook is a popular site where you can check the current market prices for used cars of all makes and models. You can also research the process on used car selling sites like carsales and carsguide.
How can you tell if any money is owing on a used car?
If you’re buying through a dealer, you won’t have to bother checking if any money is owing on a used vehicle. Dealers are legally required to provide you with clear title to any vehicle that you buy.
However, if you’re buying privately, you should check the Personal Property Securities Register (PPSR) to see if there is any money owing to a lender by the previous owner. If there is, you should ensure that the loan is paid out before you take ownership.
A good (and safe) way to do this is to ask the seller to request a lender payout figure and to ensure that you provide two cheque/transfer amounts when you buy the vehicle. One amount directly to the lender, and the balance to the car seller.
If you don’t ensure that any money owing on a used vehicle is fully repaid before you take ownership, then your vehicle could be repossessed if the seller doesn’t repay the debt.
Do you get any guarantee with used cars?
Most used cars bought from dealers that are under 10 years old come with a limited 3-month or 5,000-kilometre warranty, whichever occurs first. Some dealers may be prepared to offer more. You don’t get any warranty when you buy a used car privately.
What features should you look for in a used car?
Ideally, try and find a used car that has:
- low kilometres for its age
- a full service history
- had only one owner
- never been in an accident.
Make sure you get the vehicle mechanically inspected before you buy.
What are the most popular used cars in Australia?
The most popular used cars in Australia include the Toyota Corolla, Hyundai i30, Ford Ranger, Mazda 3 and Mazda CX-5.
Is financing a car worth it?
This depends on your individual financial situation and car-buying needs. For more information, find out if car financing is worth it for you here.
Will I be eligible for a car loan?
Once again, this depends on your individual circumstances. You can find out more information about car loan eligibility requirements here.