Cox Automotive Australia (CAA) believes that used vehicle prices continue to come down from the record highs of mid-2022, but with degrees of variability based on factors such as fuel type, vehicle age, and body type.
The CAA National Retail – Dealer Used Car Prices Index, which measures price movements of sold dealer used vehicles over each month, ended July 2023 at 141.6.
That’s a modest 1.0% reduction month-over-month (MoM) and the fifth successive month where the (weighted average) index has fallen. It’s now 4.0% lower than the used market’s price peak in August last year according to CAA.
But from a broader perspective, it says prices remain substantially higher than they were before the COVID-19 pandemic and associated market interruptions.
National Retail – Dealer Used Car Prices Index
The Price Index started at 100 in December 2019 and sits at 141.6 now, representing a 41.6% price increase on average over this period.
But context is key says CAA. The Price Index also shows that, for the most part, the biggest proportionate price increases over the past few years have been on older used vehicles rather than newer, lower-mileage ones.
Used and demo passenger vehicles aged 2 years or younger ended July 29.3% more expensive on the Price Index than they were just before COVID. By contrast those aged 2-4 years remain 44.6% more expensive, those aged 5-7 years 53.2% more expensive, and those aged 8-10 years 69% more expensive.
There is a similar pattern across other vehicle types.
SUVs under 2 years of age finished July 20% higher on the Price Index than the same age bracket was in December 2019, compared to 32.6% higher for those aged 2-4 years, 35.9% for those aged 5-7 years, and 40.8% for those aged 8-10 years.
The Price Index for pickups under 2 years meanwhile finished July at 128.5, meaning a 28.5% average price increase over the same sorts of vehicles before COVID. By contrast pickups aged 2-4 years were on average 35.7% more expensive, pickups aged 5-7 were 44.7% more expensive, and those aged 8-10 were 56.3% pricier.
Across the board CAA says it’s the older stock commanding much greater prices than they were before COVID. With improved supply of new vehicles filtering through, it would expect to see reduced demand for late model used cars, so expect this trend to continue.
It’s a similar story for the used EV and PHEV market, which tends to be quite volatile given the smaller sample size of used models in dealer inventories. CAA says the Price Indexes for these vehicles across age brackets are not holding up as well as combustion-engine vehicles and hybrids.
The respective Price Indexes for EVs and PHEVs are 99.4 (aged 2 or under), 115.4 (aged 2-4), 108 (aged 5-7), and 112 (aged 8-10). The pattern where older vehicles are relatively more expensive than before COVID likewise applies to lower tailpipe emissions vehicles too, just at a lower level.
CAA says resale values of all second-hand electric vehicles and plug-in hybrids fell at a faster rate (3.1% MoM) than the overall car parc (1% MoM).
What else does the data show? The overall number of active dealer used listings grew 6.8% MoM and 25.2% YoY for some longer-term context, meaning there are more used vehicles out there now. This drove an overall 3.8% MoM increase in Market Days Supply (MDS), which sits at 63 days across age brackets and vehicle types.
More used vehicle stock means downward price pressure should appear in market, however in the medium-term the implications of a few years of new vehicle shortages will appears: namely, a potential shortfall of late model used stock built between 2020 and 2022.
CAA says once again EVs and PHEVs are a statistical outlier with MDS figures of 76 days for those aged under 2 years, 77 days for those aged 2-4 years, and 87 days for those aged 5-7 years. Any number higher than 70 days means the market is carrying too much stock, but we will add the caveat that the sample size is still small.
The number of used vehicles sold was down 8.9% over a bumper June result. But year-to-date (YTD) the number of second-hand vehicles sold is still up 15.8% over 2022 at the same point in time. CAA says dealers are moving stock faster, with the Average Days to Sell (41 days) metric down 1.1% MoM.
The top 5 selling passenger used nameplates across July were the Hyundai i30, Toyota Corolla, Mazda 3, Holden Commodore, and Kia Cerato. The top 5 SUVs were the Toyota RAV4, Nissan X-Trail, Mitsubishi Outlander, Mazda CX-5, and Toyota Prado.
Leading the used pickup sales race were the Ford Ranger and Toyota HiLux, which were also the two top-selling used vehicles of any type – the story is the same in the new market – ahead of the Mitsubishi Triton, Nissan Navara, and Holden Colorado.
Resale values of all second hand electric vehicles and plug-in hybrids fell at a faster rate (-3.1 MoM) than the overall car parc (-1% MoM)
Manheim Wholesale
From a wholesale Manheim auction perspective, the company has enjoyed 19.5% YoY growth in volume driven in part by the return of in-person auctions at sites across Australia.
Prices on average are reducing slowly, with the index (142.8) 3.3% down MoM and 13.1% down YoY. The index peaked in May 2022 at 167.4. The main client types were ex-fleet vehicles, dealer stock, and ex-OEM stock.
CAA says the prices of older wholesale stock remain more inflated in relative terms, as shown by the respective price indexes for vehicle types broken up by their age.
For instance, passenger vehicles aged 8-10 years sold in July were on average 84.5% more expensive in relative terms than pre-COVID, whereas those aged those aged 2-4 years were 35.7% more expensive.
Likewise for SUVs, those aged 5-7 years were 39.2% more expensive than the same sorts of vehicles were in December 2019, compared to 19.3% more expensive for those aged 2-4 years.
Older pickups aged 8 – 10 years were 141.4 on the Price Index at the end of July (meaning 41.4% more expensive than pre-COVID) compared to 19.4% more expensive for those aged 2-4.
The overall top 5 vehicles wholesaled through Manheim were the Ford Ranger, Toyota HiLux, Toyota Camry, Mitsubishi Triton, Holden Colorado.
Overall 33.2% of auctioned vehicles were SUVs, 30.8% were pickups, and 33% were passenger cars.
