Car buyers are paying up to $10k more than they should be as ‘despicable’ dealers cash in on soaring demand
- Car buyers warned they could be paying more than $10,000 for vehicles in stock
- Dealers are driving up the prices of demonstrator models to meet high demand
- Industry is being hit with dire supply shortages caused by the Covid pandemic
- Growing number of drivers buying used models rather than wait for a new one
Car buyers have been told to remain cautious of ‘despicable’ dealers selling vehicles for up to $10,000 more than what they should be.
New dealerships are driving up the prices of near-new demonstrator models to entice buyers unwilling to wait several months for a new vehicle.
Dealers are taking advantage of dire supply shortages caused by the Covid-19 pandemic and adding up to $10,000 to the cost of cars in-stock.
Industry experts say the limited supply and production of new vehicles coupled with strong demand has seen sellers charge extravagant prices for models in-stock, including demonstrator models with a few hundred kilometres on the clock.
Car buyers have been told to remain cautious of ‘dodgy dealers’ selling vehicles for up to $10,000 more than what they should be (stock image)
New dealerships are driving up the prices of near-new demonstrator models to entice buyers unwilling to wait several months for a new vehicle (stock image)
Dealerships are charging up to $92,468 drive-away for Ford Ranger models that should actually cost $73,281 drive-away, the Daily Telegraph reports.
The popular Toyota RAV4 hybrid is being sold for an extra $20,000 while Subaru, Kia and Volkswagen dealerships are adding up to $10,000 for some models.
Federal Chamber of Automotive Industries chief executive Tony Weber said the ballooning costs of demonstrator models in showrooms was ‘appalling’.
‘I think it’s despicable behaviour to price gouge people when there is a supply constraint as there is at the moment,’ he said.
‘It’s opportunism and it’s something that is just not appropriate.’
Toyota Landcruisers are also in hot demand with a GXL ute selling for$82,000 – some $8,000 above what it would cost to buy new
The tradies favourite Toyota Hilux is soaring on the used market, selling for almost the same price as a new model
He said dealers keen to make a profit could actually be doing themselves a disservice as a growing number of brands embrace direct-to-customer sales.
Companies like Tesla, Honda, Mercedes-Benz and Polestar are opting to skip the ‘middle man’ and instead sell directly to their buyers.
This allows customers to buy vehicles at a fixed price with no dealer mark-up.
‘This supports examination of different business models to eliminate this sort of behaviour by dealers,’ Mr Weber said.
Car dealers keen to make a profit could actually be doing themselves a disservice as a growing number of brands embrace direct-to-customer sales (stock image)
It comes as used cars have exploded in value to the point where some older models are selling for more than it costs to buy them new.
How to cash in on the soaring used car market
Used car dealers are getting unprecedented prices for highly sought after models including Toyota HiLux, Teslas and Landcruisers.
James Ward, director of content at Drive, said those looking to take advantage of the windfall should remember that you’ll also be buying at a higher price for the next car.
So it’s a good idea to lock in what you want to buy first so you’re not left short.
He said for those who might have a second or third car their not using, now would be the best time to sell.
A growing number of drivers are willing to pay more for a used car than buying a new one as retailers report dire supply shortages and months-long waitlists.
Sellers are advertising their second-hand cars with tens of thousands of kilometres on the clock for thousands more than what they originally paid.
A Toyota HiLux SR5 that sold for $56,440 when new is listed on Carsales for $62,000 while a 2017 Toyota Corolla bought for $23,490, is listed for $27,590.
A Suzuki Jimny, a very popular four-wheel-drive, has jumped about $20,000 in second-hand value in less than two years.
A GXL ute which had done just 34km recently sold for $82,000 – some $8,000 above what it would cost to buy new.
Some listings that used to start at $30,000 are now asking upwards of $50,000.
One example was Toyota’s RAV4 Hybrid, which can be bought new for $38,490 but a used model with 24,000km on the clock now listed online for a staggering $56,960.
In the first quarter of 2022, used cars sold for a 65 per cent higher price tag than they did three years ago – and even 18 per cent more than just six months ago, data from Moody Analytics showed.