Market Insight: Used car sales remain strong

According to the report, used car sales are up by 7.2 per cent in May over a 4.4 per cent increase in April. June figures look set to continue that trend. 

“Ongoing strength in the new car market means that we are seeing an increased supply of used vehicles coming into the market, providing consumers with more options at more affordable price points,” explained AADA chief executive officer James Voortman. 

“We expect this trend to continue, particularly in the next few months leading into the end of the financial year, which traditionally sees increased activity in both the new and used car market.” 

As numerous car-makers offer end-of-financial-year incentives and discounted older-plate stock, trade-in supply of popular models will remain strong. 

“Vehicles with the strongest retained values are largely sought after and reliable Japanese makes in both the passenger car and SUV segments, as well as in the two- to four-year, and five- to seven-year categories,” added Mr Voortman. 

“The Ford Ranger has built on its impressive lead as Australia’s top-selling used vehicle and is close to breaching the 6000 (unit) monthly sales mark. The Toyota HiLux comes in second, well ahead of the rest of the pack which includes four utes in the top 10.” 

AutoGrab chief commercial officer Saxon Odgers said the end of financial year period will generate further activity in the used car market, possibly leading to an oversupply. 

“With the end of the financial year nearly here, Australians are making major selling or purchasing decisions, which has led to the used car inventory approaching an oversupply,” he stated. 

“The retained value of vehicles has continued to fall while the days to sell has increased, reflecting the oversupply of used vehicles. We see an increase in vehicle transactions at the end of the financial year … and see great buying opportunities (ahead) as a result.” 

Last month, there were 296,542 used vehicles listed for sale, an increase of 7.2 per cent over April. Of those vehicles listed, 191,625 were sold (for a clearance rate of 64.6 per cent). The average time to sell a used car is 45.5 days. 

The AADA says 64.7 per cent of used cars sold were traded privately with the remaining 35.3 per cent traded through a dealership. 

Used car listings grew in every state and territory with South Australia experiencing the highest increase (up 8.5 per cent) and Tasmania the lowest (up 2.0 per cent). 

Sales grew in every state and territory with Queensland and the ACT experiencing the largest monthly sales increases (up 7.3 per cent). 

Retained values continued their gradual decline with passenger vehicles holding their value best in the two- to four-year age bracket (84.1 per cent) as well as for the older five- to seven-year category (69.9 per cent). 

For May, utility vehicles comprised five of the top 10 most popular used vehicles sold in Australia, with the Ford Ranger and Toyota HiLux taking first and second place (and reflecting that of new vehicle sales). 

Passenger vehicles held four of the top 10 spots, and SUVs just two, countering the model division shown in the new car market.