Ajay Bhatia, the owner of Carsales Australia, has said that higher prices for used cars will be in effect for some time.
Since the customers are willing to pay more for second-hand cars that are posted on the online car classifieds group’s platform, the salesmen believe that there is more profit to be made. When Covid-19 came to Australia, people started avoiding public transport and decided that buying second-hand vehicles is a much safer option. Mr. Bhatia also said that the car manufacturing industry was paralyzed by Covid-19. That was the main reason why second-hand vehicles become a popular choice for Australian people.
“This situation won’t be solved within the next month, this is here for many months for sure and whether it stays for a year, or two years, is the question,” he said.
Usually, used car prices are more or less stable, eventually changing for an unnoticeable sum. Yet, since the pandemic started, prices changed drastically.
For example, one of the most popular second-hand vehicles was Toyota Landcruiser that was priced at $62,500 last month. Compared to October 2019, the car has become more expensive by 25%. Compared to last year, Toyota Hilux is also more expensive by 23%.
The auto industry in Australia was hit hard by Covid-19. Not only that their stocks went down, but also their sales dropped by 48.5%. It has become obvious that Australians have started avoiding buying new cars.
There is also another unusual thing about car prices. Some vehicles that are barely a year old are now being sold as a second-hand product at a higher price than what the buyer initially paid.
“If you bought a car in the last 6-12 months then there’s a good likelihood that it’s worth more than what you bought it for. And I never thought I’d say that for cars because cars are known as depreciating assets,” Mr. Bhatia said.
Mr. Bhatia’s company, Carsales, has recently launched a new interactive tool (FACTS+) that can help you learn more about the current prices and sales on the market.