Used vehicle prices in Australia are 25 per cent higher than they were during the same period last year, marking an all-time record rate of growth for the sector.
Although new car sales are dwindling, demand for used vehicles has accelerated rapidly, smashing the previous record of 20 per cent growth set in December 2009.
According to financial intelligence company Moody’s Analytics, this growth is largely being driven by interest in the ute segment, which has grown by 32 per cent compared to 2019.
Michael Brisson, Auto Economist at Moody’s Analytics, said cars that are 3-5 years old are proving most popular – a significant reduction on the average Australian vehicle age of 10.4 years.
As for the most in-demand models? "In a general sense, Toyota Hilux, Ford Ranger, Toyota Camry, Toyota Corolla, Toyota RAV4, Isuzu D-Max, Toyota HiAce and Mitsubishi Triton are some of the vehicles that are driving increases," Mr Brisson told CarAdvice.
The price hikes are not only limited to Australia, but rather a global phenomenon driven by a reluctance to take public transport amid the coronavirus pandemic.
In fact, data shows public transport usage in Australia is down by 60 per cent compared to pre-pandemic levels recorded in January 2020.
"The increased demand for vehicles is coming from people who have continued to shun group mobility. Consumers have opted for personal transportation in place of ride- share services or public transportation," Moody's Analytics said in its report.
For buyers or sellers looking for the right moment to make a move, Moody's predicts used car prices will "move sideways" for the remainder of 2020, with price gains slowing as supply increases.
"Still, the extraordinary gains in prices are not expected to turn quickly south. The rise in prices has shown to be persistent over the past three months and, given current fundamentals, will likely stay elevated compared with pre-pandemic values," Moody's said.