High/Inflated New and Used Car Prices since COVID

ozzymoo on 01/11/2020 - 23:53

Decided that my newly acquired 2001 Mazda 323, although in great condition, can’t be expected to do my family’s average 750km each week. Looking to get a new reliable family car (2018-2021).

Prices are crazy and I’ve done a bit of research to see that New 2020 cars are selling for approx. $4-8k more than in 2019 on the same models. Used car prices are through the roof too. I’ve read up re the supply/demand chain being unsettled, and more people wanting cars to avoid public transport, and people spending money on their car for road trips etc rather than travel whilst borders are closed.

So when do we think is the best time to buy? End of year plate clearances… Do I bite the bullet and make a purchase? Should I wait? How long do we think until this all settles, and the buyer with the cash has the upper hand again in negotiations.

Love the new Rav-4… and can’t get past it to want any other car at the moment.

Automotive

Comments

  • Boioioioi on 02/11/2020 - 00:15
    +3

    From my perspective:

    The point of money is to help you enjoy your life. The sooner you have the new car, the longer you can enjoy it for. You can negotiate when you buy the car to the point I assume the increased price will only be slight.

    Further, you'd be insuring your families safety if you get a new car. Each day you drive in an old car is another day taking risk of a bad accident. So if I were you, I'd go get that car you want. :)

    Of course, just my way of looking at it. Your opinions may differ, in which case fair enough.

  • AustriaBargain on 02/11/2020 - 01:06
    -2

    Maybe covid means more people have more time to shop around, which means any individual car has a lot more interest than before covid, driving the prices up just because more people now have the time to consider each car. Before covid they would sell to whoever they could, but now you can sell to everyone.

    • SydStrand on 02/11/2020 - 11:49
      +1

      Don’t know why you’re being negged… it’s entirely plausible that that is a factor, combined with public transport anxiety, and reduced discretionary spending on dining, outdoor entertainment, and travel. Used car sales are one of the COVID winners, along with home entertainment, puppies, instruments, and coffee equipment.

  • FW190 on 02/11/2020 - 01:54
    +1

    who knows, with COVID, where people were/are loosing their jobs left right and center, and the ones who still has a job are more likely to work-from-home (and hanging onto their money), you would think demand for cars would be down? but the opposite happened.

    I am glad that I am not a gambling person :)

    but yeah, I been eyeing some particular models of car on the second hand market for a while and price are definitely on the rise this year, oh well, I am not in a hurry anyway.

    • Euphemistic on 02/11/2020 - 08:07

      Part of the increase in demand is people spending their ‘holiday’ money on local stuff. Can’t take your regular expensive holiday, might as well upgrade the car while you can. Of course those who lost work won’t be, but anyone who could work from home and maintain their income will also have additional savings from not commuting or buying lunch/coffee.

      • FW190 on 02/11/2020 - 13:43

        the cynic in me also thinks that it is partly fueled by people spending their super and extra Centerlink payment on their dream car, but hey, it is their money……….

    • ozzymoo on 02/11/2020 - 08:17

      yep it’s interesting how the opposite happened with the prices, rather than going down they have gone up. Surely it has got to max out and drop soon- repossessions, people getting bored of their new wheels, and when interstate borders open and interstate travel resumes for all.

      • FW190 on 02/11/2020 - 13:45

        yeah repos would be another factor, while I don't wish that upon anyone, but you would think some people may no longer be able to afford their repayments, therefore there would be more cars on the second hand market? again, lucky I am not a gambling person :)

  • pao2x on 02/11/2020 - 08:02

    Get the Rav4 then, it is not going to get cheaper anytime soon.

  • whooah1979 on 02/11/2020 - 08:17

    family’s average 750km each week. Looking to get a new reliable family car (2018-2021).

    You can’t go wrong with a large Japanese diesel SUV/4wd. Lots of space, fuel efficient, safe, high seating position, good resale value, undisputed reasonably, etc.

    • ozzymoo on 02/11/2020 - 08:22

      I’m also going to look at the Forester, but based on my online learnings, the Rav 4 is my winner so far. Also going to look at the Kia Seltos, looks Ok in the glossy photos but I haven’t researched or seen one in the flesh yet so I’m unsure how much smaller than the Rav 4 it is.

      • 0FoxGiven on 02/11/2020 - 09:27
        +4

        Get the Rav4 hybrid. More fuel efficient than any diesel equivalent, great value for money and great resale value

      • Elppa8 on 02/11/2020 - 09:34

        Subaru are offering 3 years free servicing on demonstrater models this month if that helps.

        • ozzymoo on 02/11/2020 - 10:08
          +1

          Thanks, I’ll check this out, be interested to know how much this amounts to as I’ve heard through various sources, including my local mechanic, that servicing a Subaru is pretty expensive

          • ozzymoo on 02/11/2020 - 10:21
            +1

            @ozzymoo: Just checked it out, about $1200 or so for a three year servicing plan on a forester. (EDIT: Not sure how to delete the @myself, was just adding this comment for others benefit!)

    • abb on 02/11/2020 - 10:19
      +2

      undisputed reasonably

      I dispute this unreasonably.

      (Seriously though what did you mean?)

      • mapax on 02/11/2020 - 10:25
        +1

        Probably “undisputed reliability”?

      • whooah1979 on 02/11/2020 - 10:31

        Heh.. Thanks for that.

  • [Deactivated] on 02/11/2020 - 08:36
    +2

    What suddenly goes up usually suddenly comes down.

    There must be a reason if the prices are to be sustained. Currently, the reason is crippled logistics. I don't think anyone truly believes this will last for long.

    If you can wait a year or two, the prices will come down again. If you cannot, you'll just have to pay what the market wants.

    • pharkurnell on 02/11/2020 - 11:22

      i dont think it will take a year or 2…
      people are smarter shopping for cars these days… if nobody is buying anything - give it a few mths tops they will come down or they will shut the doors.
      suckers would be handing $ over right now.

    • Drakesy on 02/11/2020 - 11:56

      In Perth, it took some 3-4 months for the used car prices to return to normal (we're still approx 5% up on pre covid) but it's much better than the 20%-30% premium some cars were demanding during covid.

      • SBOB on 02/11/2020 - 20:42

        some cars were demanding during covid.

        wait? covid is over?

        • Drakesy on 02/11/2020 - 20:53

          Well it has been for 3 months here in perth

  • Seraphin7 on 02/11/2020 - 09:26

    So when do we think is the best time to buy?

    Who knows?

    Will you suddenly suddenly get a bargain in the next three months? Unlikely.

    Will prices normalise over the next one to three years? Probably.

    Will your current vehicle survive until prices normalise? Are you prepared to see what happens on this front in an attempt to stretch out until "normal prices" return? Are you prepared to pay market price if your current vehicle "blows up" and you need to get something urgently? These are the questions that are actually the issue here.

    Love the new Rav-4… and can’t get past it to want any other car at the moment.

    If you've got the cash and can justify the cost, buy it, and forget about what might happen in the future.

    • ozzymoo on 02/11/2020 - 10:06

      I could wait a few months but I can’t wait a couple years. I’ll just have to negotiate and try and get the price somewhere close to pre-Covid but not get my hopes up for any bargain.

  • mini2 on 02/11/2020 - 09:51

    Can't remember who's stats it was (Pickles or Manheim, one of the two) says their auction results have gone up 20ish % YoY but starting to flatline as of Sept. Maybe it's going to head down soon with more people returning to work and more likely to buy new cars therefore increasing more used car supply? Provided there aren't any supply issues, of course…

  • MassNerder3r on 02/11/2020 - 10:56

    I've been keeping my eye on a Land Cruiser Prado throughout the whole year and the average price for these cars has definitely gone up.

    From 45-50k to 52-59k

    My guess is…everyone's going camping instead of traveling lol

    I hope when the border/travel restrictions lift, prices will drop but yeah… who knows when that's gonna happen.

    • whooah1979 on 02/11/2020 - 11:07
      +1

      They used it to cross the VIC and NSW/SA border.

  • spackbace on 02/11/2020 - 11:49
    +1

    Prices on 75% of Toyotas went up on July 1 due to exchange rates, nothing to do with supply & demand. So yes the RAV4 saw a $1300 (plus extra stamp duty) increase.

    If looking at Hybrid RAV4, it's going back out to factory order wait times now, so don't expect a 2020 clearance car or anything. Go in, negotiate, and get your order in now for a 2021 plated vehicle

    • boomramada on 02/11/2020 - 15:27

      What are the tips on negotiating on pre order?
      It's not like they need to get rid of lots of unsold items in stock.

      • spackbace on 02/11/2020 - 15:51

        Build rapport, don't be a dick, put in an offer that's reasonable :)

  • Drakesy on 02/11/2020 - 12:01

    So cars, much like houses are a fluctuating price market. When an injection of cash goes into the market the prices go up. In the instance of houses it's ridiculously low interest rates coupled with large first home buyers grants push prices up across the board.

    In the instance of cars it's heavily reliant on supply (decreasing trade ins due to economic uncertainty caused be covid and the recession) and demand (less people taking public transport due to covid). This will even out as covid is no longer an issue

    This coupled with the sugar rush that was jobseeker/keeper gave every man and his dog a reason to snatch up cars faster than they could be supplied. At least once the jobseeker/keeper is turned off they'll return to normal.

    IMHO in Perth the prices have returned much to pre-covid prices - just took 3-4 months…

    • spackbace on 02/11/2020 - 13:15

      IMHO in Perth the prices have returned much to pre-covid prices - just took 3-4 months…

      Not on near-new cars (1-2yo) from what I've seen, due to new car stock shortages and new car price increases

      • whitelie on 02/11/2020 - 13:50
        +2

        Even slightly older cars are still higher than pre-covid currently. I sold a Qashqai and CX-9 (both 2015 models) for well above what we were looking at selling them for 12 months ago…Both literally took less than 4 hours to be sold from placing the ad.

  • Almost Banned on 02/11/2020 - 12:15

    I have been looking at used small cars for awhile.
    I seemed to see a drop in price immediately following COVID - then a marked increase since.
    The prices still seem too high to me - and I don't have to buy, so will sit tight for awhile.

  • Indomietable on 02/11/2020 - 13:24
    +2

    The Westpac employee with BMW were right all along!

  • PepperedAngus on 02/11/2020 - 17:00

    Buy if you can get between 10-15% of the brand new RRP. If not, then look around elsewhere and wait.
    Time of year will dictate how easy it is to get that deal.
    I bet the inflated used car prices with drop quickly once the supply of new cars stabilises again.

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