What’s with used car prices?
The active number of cars listed on Carsales.com.au is almost half of its normal levels. What does that mean for you?
Buying new cars just became very different – very quickly. The days of bouncing from dealer to dealer seeking out the keenest sales manager or timing your purchase to the end of the month aren’t yielding the same rewards once on offer. Many buyers are now finding themselves paying full retail pricing and an extended delivery period because there is no incentive for new car dealers to sell their limited stock at discounted prices.
Many used cars have experienced a surge in valuation off the back of limited stock in the market. We’ve seen some used cars selling for more than their purchase price just 18 months ago – it’s unprecedented.
A 2017 Ford Ranger Wildtrak purchased for $42,000 just 18 months ago, today has an asking price of $54,000. A nearly new 2020 Suzuki Jimny will set you back more than $10,000 above the new RRP, and there are countless examples of cars just like this.
Some used car dealers are moving to sell used cars by adding a dealer delivery charge above the advertised sale price. No discount and they’ll also charge a $995 dealer delivery.
If you are not keen on selling your existing car privately, the good news is the trade-in prices have also increased to reflect market conditions. Whilst the new car discounts may be less than what you’d expect; you are likely to experience an unlikely surprise in the valuation of your trade-in.
Private sellers are now in an envious position. Never before has a private seller been better positioned to fend off the waves of SMS low ball offers. This results in people being less likely to trade their cars at the dealership, which only works to drive up used car prices at dealerships. These increased prices are a leading indicator of private sale car prices. Get it? The car owner is winning here all day long.
Often the landing place for excess stock. Government departments, large corporates and finance companies all use auctions because of the sales efficiency. But what happens when prices are surging upwards – who is in a rush to send their cars to be sold at auction?
Vehicle Data Services
Finance companies have long relied on vehicle data companies to provide pricing data around car valuations to assess finance contracts. The market is shifting so quickly that many of these valuation methods based more on algorithms than actual market conditions are not useful in determining a fair market value. If these data companies could offer cars for sale based on their data valuation prices, we think they would be the busiest car dealership in Australia.
If you have a novated lease, you have the opportunity to make an offer to purchase your car at the end of your lease term for the residual value. If the sale proceeds are greater than the buyout amount, you can retain the profit tax-free. Many of our customers are experiencing excellent outcomes on their vehicle changeovers.
Who uses Lendly Pay?
- Permanent Employees (Full-Time, Part-Time)
- Employees who do not use their car for work
- Employees wanting to salary package their second car
- Employees who receive a car allowance
- Company Directors seeking to maximise their tax benefit
Lendly Pay is one of Australia’s fastest-growing employee benefits platforms. We allow employees to pay their car bills before they pay their tax bill. If your employer doesn’t already offer Lendly Pay, there’s never been a better time to get the conversation started.