With Australia experiencing a severe car shortage and fuel prices soaring, you might look at that car in the driveway and wonder if it’s worth it.
Used cars in Australia hit record prices, with Moody Analytics data showing used cars selling 65% more in 2022 than before the COVID-19 pandemic: 18% of those sales happened over the past three months.
If you’ve been seduced by the work-from-home lifestyle, you may not be getting as many miles on your engine as you used to. With cars no longer depreciating significantly in the same way as before, it might be time to consider whether your car might be worth more on the market than it was in your garage.
How much is my car costing me?
A report from the Australian Automobile Association places the national average transport cost per year in capital cities at $20,855 (and $17,195 in regional Australia). This average is based on a two-car home for two people in their 30s who don’t use public transportation. These amounts are both up more than $2,000 from their 2019 costs.
In the past month alone, we have seen auto loan interest rates start to rise, increasing the cost of repayments as well as rising fuel costs. We can safely say that the costs of running cars have increased, even though WFH lifestyles are more dominant.
With more and more alternatives to owning a car – widespread public transport (estimated by the Australian government to be 30 times more affordable than owning a car), car sharing and carpooling apps – plus more and more people opting for green cars, you might have been tempted to switch.
Should I sell my car?
If you’re considering swapping your car for an eco-friendly alternative or using public transport full-time, now could be the perfect time.
Traditionally, cars depreciate immediately upon purchase. The more kilometers you have on the odometer, the lower the resale price. Unable to add value to a car, the prospect of selling yours might never have seemed particularly enticing! Things are a little different at the moment.
With the limited supply of new cars on the market, recent conditions have seen some used cars selling at prices close to new cars.
Lloyds Auctions has recently seen cars with relatively low mileage – take a Toyota Landcruiser GXL Ute with 34,000 miles on the odometer which sold for around $8,000 above the RRP of $82,000 due to strong demand for it. the brand.
Electric vehicles are also in high demand – mirroring the rest of the market – with Teslas selling at Lloyds-owned car yards for $5,000 above standard retail price.
If your vehicle is a sought-after model, and no longer just classic cars and luxury models, you could be sitting on a goldmine. The Suzuki Jimny, a popular lightweight 4×4, is valued at around $30,000, but can be seen in used ads for $50,000.
What if I’m looking to buy a car?
If you’re looking to take advantage of the high prices on the used market, there are a few things you need to consider.
It’s not as simple as selling your car at a bargain price and snatching something easy. If you are looking to buy again, you will be buying in the same market you sold, and the market is in a state. New cars are hard to come by, with long waiting lists and inflated used prices.
Although we are big fans of public transport and love to use carpools, sometimes you need a car of your own. This is the reality in areas less served by public transport in particular. If you’re looking to buy a used car, high prices and rising rates may mean you need more money than you previously thought.
Are you looking for something new to rev your engine? Take a look at some of our top auto loans and our guide to buying a used car.