August 31, 2020

Modern coupe car in colorful spotlights on a black background. Front view. 3D illustration. Luxury cars.

Where Are All the New and Used Cars?

Steve Sell 31/08/20

New and Used Cars are Hot Property in Australia.

The new and used car market is a sellers’ market as cars are in short supply in Australia.

Dealers are paying 20% to 30% more for used vehicles than they were prior to Easter 2020.

Demand has surged since Easter.

Commuters have decided not to risk using public transport for fear of contracting Covid-19.

They have decided to drive instead.

Combine this with people accessing their super to buy cars to tow boats and caravans so that they can holiday within Australia.

www.wacars.com.au has a great range of cars in Western Australia,

People are still unable to travel interstate resulting in travellers taking to the road for their holidays and business trips.

Stock Shortages. Price Rises.

The rush to avoid public transport has coincided with new and used car stock shortages.

This has resulted in prices have rising to a point where most dealers have a fixed price for the stock they have.

Dealers are not prepared to negotiate.

The shortage of stock (new and used cars) is the worst many dealers have ever experienced.

The demand for used new and used cars currently outweighs supply.

This has increased the price of later model, low kilometre vehicles.

The motor vehicle industry is seeing demand greater than the available supply.

December-January is looming as a low water mark in stock availability.

Some large dealer groups predicting that they may have no stock left.

Many dealers are looking at consolidating sites and reducing staff numbers if there is no improvement in used car stock availability.

The long lead times for new car arrivals is not helping as the trade ins are not coming onto the market.

 What Happens Next?

Demand does not seem to be easing for popular models, particularly recreational vehicles, and SUV s.

Toyota stock new and used is in very short supply.

It is hoped that new car deliveries will resume later in the year (2020) and the trade ins will come onto the market.

Demand may drop after rent and mortgage deferrals are reduced or eliminated and people start to feel the bite of reality.

Are New Cars an Option?

The surge in used car prices has resulted in more people considering new cars.

New cars could be a great option.

With the increased price of late model used cars equal to or in some cases higher than the cost of a new car.

The downside is the buyer may have to wait for delivery of their new car (some models are 6 to 9 months away).

New car stock levels are expected to improve over the coming months.

Manufacturers are ramping up production (where possible) to pre Covid levels.

One of several factors that could prevent a ramp up in production is a resurgence of Covid-19 in Korea or Japan.

Pricing for new cars could also rise if there is an increase in the $USD to $AUD exchange rate.

Combined with any strengthening of the Japanese yen and Korean won versus the $AUD.

In Australia, most of our new cars are imported from either Japan or Korea.

If you want to buy a car, new or used, ask yourself, do I want to pay these inflated prices or can I wait six months until prices stabilise.

We are seeing instances of multiple offers on the same vehicle.

When a buyer hesitates the car is often sold, and it is hard to find a replacement vehicle.

If you want or need a car be decisive and buy the car.

Please do not expect a dealer to discount the price or hold the car for you to make up your mind.

In this market it is not likely happen.

https://www.wacars.com.au/2020/02/28/10-tips-get-car-finance-pre-approved/