Average used car sales prices in Australian dealers fell a further 0.9% during May 2024 and are now 6.8% lower on average than last year, according to the latest Cox Automotive Australia (CAA) data.
While sales of dealer-listed used vehicles grew 6.7% for the month and are up by 4.9%
for the year, dealer inventory hit the second-highest level in the past 12 months and is up 16.1% year-over-year (YoY).
Meanwhile, the wholesale auction market continues its recovery in terms of sales volume, with Manheim Australia recording the highest passenger and light commercial monthly tally in almost four years.
Strong OEM, fleet management, government, and dealer asset volumes drove Manheim’s monthly auction sales results, up 10.3% MoM and 40.6% YoY. Manheim auction sales volume is further up 40.3 per cent year-to-date YTD.
Dealer-used car supply
The number of used and demonstrator vehicles actively listed in retailers grew 2.3% month-on-month (MoM) in May as inventory swelled to its highest point since November 2023.
The used vehicle numbers cited come from the CAA retail database powered by its various dealer-facing SaaS inventory and retail solutions, comprising a statistically significant proportion of Australia’s total dealer-used vehicle market.
Almost half of all dealer-used and demo listings (47.7%) are SUVs, 30.2% are traditional passenger vehicles, and 21.6% are light commercial utes and vans. Just 0.55 bof listings are an EV or PHEV, as the market awaits the first significant wave of pre-owned vehicles.
Despite the inventory growth, Market Days’ supply (MDS) ended in May at 64 days, down from 65 days in April and below the CAA benchmark of 70 days. As recently as December 2023, the MDS figure was 68 days.
The top five most common vehicles in dealer-used inventories are the Ford Ranger (stock up 3.7% MoM), Toyota Hilux (down 1.3%), Toyota Corolla (up 11.4%), Toyota RAV4 (up 13.7%), and Mitsubishi Triton (up 4.6%).
Reflecting the return of supply into the new vehicle pipeline, availability of late model used Toyota RAV4s increased significantly, with inventory swelling 16.1% MoM for examples under two years and 23.9% for those aged two to four years.
Dealer-used car sales
Dealer used and demo vehicle sales were up 6.7% MoM and 4.9% YoY, and on a YTD basis, are 9.3% higher than the same period in 2023. This aligns quite closely with new market sales growth of 12.2% YTD.
Driven by growing inventory levels and more discounts on the new vehicle side, dealer-used transaction prices fell for a third straight month and, on a market-wide basis, are the lowest they have been on average since late 2021.
CAA measures price changes through the CAA Dealer Used Vehicle Delisted Price Index, which tracks average sale prices compared to a baseline period of 100 points in December 2019.
The Index currently sits at 134, denoting an average 34% used sale price increase (volume-weighted and adjusted by new MSRP), including inflation between December 2019 and May 2024.
For context, the Index is down 6.85 YoY and 9.5% from the all-time high Price Index of 148.1, hit during August 2022 when COVID-era shortages were biting most challenging.
Some 47.8% of dealer-used sales in May were SUVs, 30.9% were passenger cars, 21 per cent were light commercials, and 0.3 per cent were BEVs and PHEVs.
Across all segments, 39.7% of sold used vehicles received a price cut between listing and sale by an average of 7% per unit.
The top five used vehicles sold regardless of age were the Ford Ranger (up 12.9% MoM), Toyota HiLux (up 13.5%), Toyota Corolla (down 2.7%), Toyota RAV4 (up 10.6%), and Mitsubishi Triton (up 10.8%).
Digging a little deeper, we saw sales of used Toyota RAV4s aged under two years hike by 19.2% MoM, sales of Toyota Camrys aged five to seven years increase by 32% MoM, and sales of Ford Rangers aged eight to 10 increase by 20.9%.
As has become a familiar trend, there are discrepancies in the CAA Price Index of vehicles depending on their age and their segment, with older cars and traditional low-riding passenger hatches and sedans the most inflated relative to December 2019,
Overall, passenger cars have risen 44.7% since December 2019, and SUVs have risen 25.9%.
Older vehicles tend to remain proportionately more inflated relative to pre-COVID prices, driven partly by household cost of living pressures spurring demand for cheaper cars.
Manheim wholesale auction data
Manheim auctions had a strong May result in sales volumes, driven by a healthy supply of desirable ex-government vehicles, onboarding several new customers, and healthy volumes from fleet management organisations (FMOs) that use Manheim auctions for asset disposal.
The May 2024 result was the strongest since mid-2020, as physical and digital auction volumes returned towards pre-COVID levels. The most significant sources of vehicles sold through Manheim’s national auctions came from dealers, OEMs, FMOs, and government fleet departments such as councils.
This latter point is not surprising given government fleet sales are up 32.4% in the new market, almost three times the pace of the overall market. That means there is a more significant inflow of assets for disposal.
Meanwhile, Cox Automotive Australia’s public-facing car buying service, Sell My Car, achieved its best result in volume delivered to auctions since September 2017.
This drives much of the vibrancy in Manheim’s clearance lanes, focusing on older and more affordable stock.
Meanwhile, average wholesale transaction prices slowly return to earth after spiking during COVID. The Manheim price Index sits at 136, denoting an average 36% price increase on wholesale vehicles of all types and ages since December 2019.
This Index is down 8.4% YoY and 18.9% since the wholesale market peaked in May 2022. The message to vendors and prospective wholesale auction buyers (dealers and the public) is that average purchase prices in this market are down almost 20% over the past two years.
The top five most purchased vehicles at Manheim auctions in May were the Ford Ranger (up 17.7% MoM), Toyota Camry (up 19%), Isuzu D-Max (down 9.5%), Toyota Corolla (even), and Holden Colorado (up 2%).
