Australia’s used car market is ‘going bananas’ with old vehicles selling for 65 per cent more than they did before Covid – here’s how to avoid getting ripped off
- Used cars are going for huge prices as buyers don’t want to wait for new models
- Some second-hand cars are selling for up to 65 per cent more than in 2019
- Buyers have been warned to beware of scammers trying to cash in on the market
Second-hand cars are going for big money because of a shortage of new models but buyers should be wary of dodgy operators trying to capitalise on the market, car experts revealed.
Used cars sold for a 65 per cent higher price tag in the first quarter of 2022 than they did three years ago – and even 18 per cent more than just six months ago, new data from Moody’s Analytics shows.
For example the Suzuki Jimny, a very popular small four-wheel-drive, has jumped about $20,000 in second-hand value in less than two-years, with listings that used to be $30,000 now asking $50,000.
James Ward, director of content at Drive, said the market was going ‘bananas’ with sellers getting unprecedented prices and some sought after models even appreciating in value.
The Suzuki Jimny (pictured) is one model pulling big asking prices second-hand in 2022
The Toyota Hi-Lux is a favourite of tradies who are splashing lots of cash even for used models
‘In many cases, you’re able to sell a car that’s 18 months old for basically what you paid for it,’ he told 9News.
‘Used cars actually going up in value is something we’ve never, ever seen.’
Tradie favourite the Toyota Hilux is another model demanding big prices with Dan Baxter from Ballarat saying he bought one in 2014 and sold it for just $1,500 less in February this year with 225,000km on the odometer.
The surging market for used cars is being driven by long wait lists for new shipments thanks to supply-chain issues stemming from the Covid crisis and Russia’s invasion of Ukraine.
But this has been exacerbated by manufacturers slowing production over the course of pandemic lockdowns just as demand peaked – with consumers unable to spend their cash on holidays or socialising, looking to upgrade or upsize their vehicle.
‘You’ve got ridiculous waitlists on even regular cars, 12 to 18-month wait-times,’ Mr Ward said.
He said those looking to switch their car and take advantage of the windfall should remember that you’ll also be buying at a higher price and to lock in what you want to buy first so your not left short.
But he added for those who might have a second or third car their not using, now would be the best opportunity to sell.
Buyers are also being warned of scammers who wind back odometers to make it appear as though a car has done less kilometers so they can fraudulently ask an even higher price.
NSW Minister for Fair Trading Eleni Petinos said the incidents of this type of scam are on the rise.
Consumers are being warned to watch out for sellers who wind back the odometer with one Subaru XV being sold with 400,000kms wiped off, according to NSW Fair Trading
Fair Trading Minister Eleni Petinos (pictured) outlined some ways consumers could protect themselves
‘NSW Fair Trading Investigators dished out $112,200 in fines and 76 penalty notices in 2021 and 2022 – a huge jump from 22 total penalties in 2020 – so anyone considering conning a potential buyer by odometer tampering should know that when you are caught, it’s going to cost you,’ Ms Petinos said.
In one example investigators found, a seller shaved off more than 400,000km off a 2012 Subaru XV, reducing the odometer from 470,000km down to 52,709km.
The vehicle was then sold for $32,000, an $11,000 increase on the original sale price.
In another example, a 2009 Toyota Hilux was resold for $30,980, more than five fold its sale price of $6,000, after the odometer reading was lowered by about 280,000km.
But Ms Petinos said there are ways consumers can protect themselves.
‘It is important to see the registration paperwork and proof of ownership of the vehicle, as well as meet the owner and sight their identification,’ she said.
‘Have the vehicle inspected by a licensed repairer and conduct a Personal Property Securities Register check (PPSR) or buy a vehicle history check.’
If buyers suspect odometer tampering they can report the issue on the Service NSW website (stock image)
Buyers should also get a receipt from the seller which includes the VIN and engine number and check their signature matches their ID.
She said most cases investigated by NSW Fair Trading have been carried out by individuals without motor dealer licences. The vehicles are commonly advertised on online sites such as Facebook Market Place and Gumtree under fictitious profiles.
Mr Ward revealed a good move is to also look for second-hand cars which still have some warranty and included services left.
He added that he expects prices will return to normal in 12 to 18 months.
Buyers can also report suspected cases of odometer tampering on the Service NSW website.