Used car prices are likely to tumble this year as Australia grapples with an oversupply of used models.
The used car oversupply is attributed to freer flowing stock of new cars after the increased wait times and short stock brought about by the pandemic and then the semi-conductor shortage.
While the used car market prices are expected to fall drastically in 2025, it remains to be seen if they will revert to pre-COVID levels.
The December edition of the Automotive Insight Report (AIR) shows that the used car market observed a 3.8 per cent drop in supply after months of oversupply, with listings falling to 322,532.
However, according to the AIR, the market continues to favour buyers with sales observing a significant decline of 8.1 per cent to 181,724, offering consumers ample opportunity to strike a good deal during the festive period.
AADA CEO James Voortman. outlined how the average days to sell have increased to 48.7, the highest since October.
“This suggests that sellers are dealing with slower moving stock. This trend is expected to continue in 2025 as the growing oversupply of new vehicles creates a spillover effect into the used car market,” Voortman says.
“All states but Northern Territory and Western Australia experienced a fall in the number of cars listed for sale.”
Retained values remain on the downward trajectory, with almost every vehicle segment across every age category experiencing a drop in value for the month. Oversupply of new vehicles is negatively impacting retained values for used EVs as well, potentially prompting sellers to hold on to their vehicles for shorter periods of time.
“Average days to sell a used EV have returned to August levels, with Western Australia and South Australia experiencing increased demand, as reflected in a 19.8 per cent and 10.7 per cent rise in EV sales, respectively,” Voortman says.
Highlights from the AIR for December
- 181,724 vehicles were sold in December, a decline of 8.1 per cent compared to the previous month.
- Northern Territory and Western Australia were the only two states experiencing a jump in listings by 7.5 per cent and 0.5 per cent respectively.
- 322,532 used cars were listed for sale in December, a decline of 3.8 per cent from the previous month.
- All but Western Australia and South Australia experienced a decline in used EV sales.
- Average time to sell a used car has gone up to 48.7 days.
- Every vehicle segment across every age category experienced a drop in retained value for the month, with the exception of LCV-Utes in the 2-5 year age categories.
- The Ford Ranger remains Australia’s best-selling used car, followed by the Toyota Hilux.
- In EVs, MG MG4 regained its position as the best-selling vehicle.