This year is shaping up to be a buyer’s market for cars in Australia, with prices anticipated to drop significantly due to various key factors.
According to industry experts, the country is currently grappling with an oversupply of used cars, leading to a decline in demand and, subsequently, prices.
Data from Auto Grab and the Australian Automotive Dealers Association (AADA) reveals that used car sales have been steadily decreasing for four months, with a total of 322,532 active listings in December 2024, representing a 3.8% drop from November.
Oversupply of New Vehicles Impacts Used Car Market
The AADA notes that the oversupply of new vehicles is having a ripple effect on the used car market, driving down retained values across all vehicle segments and age categories, except for LCV-Utes in the 2-5 year age categories.
As a result, sellers are facing slower-moving stock, with the average days to sell a used car increasing to 48.7 in December.
The top 10 best-selling used cars in December were led by the Ford Ranger, with 4,992 units sold, followed closely by the Toyota Hilux and Toyota Corolla.
Electric Vehicles Also Affected
The oversupply of new electric vehicles is also impacting the second-hand market, with listings dropping 4.1% and sales falling 3.3% in December.
The MG MG4 regained the top spot as the best-selling electric vehicle, surpassing the Tesla Model 3.
Industry experts attribute the soft used car market to weak demand in certain sectors of the new car market, exacerbated by interest rate and cost of living pressures affecting Australian families.
With prices expected to continue their downward trend, 2025 may be an ideal time to purchase a car, but sellers can anticipate poor trade-in values for their used vehicles.