Australian dealers have disputed claims that used-car prices have risen by as much as 35 per cent – and say the real figure is closer to "five to 10 per cent".
According to data from US firm Moody's Analytics, used-car prices in 2021 are continuing the astronomical trajectory they set in 2020, recording a 35.8 per cent surge over the last 12 months to January – based on wholesale data it compiled.
Moody's claimed January figures marked the biggest lift in prices since it began recording used-car prices in 1999, with the first week of February also already showing a 4 per cent rise.
However, a number of major multi-franchise showroom owners in Sydney and Melbourne have told CarAdvice used-car price increases of 35 per cent are unrealistic.
One multi-franchise dealer, who spoke to CarAdvice on condition of anonymity, called the quoted percentage figures "lunacy".
"It's lunacy to say used car values are up to 30 per cent. Simple maths means they can't go up by that much otherwise people are better off buying a new car," the dealer said.
"Also, finance companies won't finance people if the sale price of the car is significantly higher than the book value. I think a more realistic number is five to 10 per cent, but no way it's any more than that."
Another multi-franchise dealer said while some showrooms were "paying slightly more for trade-ins", "people are also paying slightly more for a new car, so in a lot of cases the changeover [price] is the same".
"We are getting probably five to 10 per cent more for a used car, but the bubble will burst at some point," the dealer added.
"Once [more new-car] stock turns up in the second half of the year a lot of cars will flood the market and the price of used cars will start to come back to where they were.
"But there's no way the value of used cars have increased by 30 per cent. Maybe on some rare models, but I haven't seen it. The problem is, those reports give people unrealistic expectations when they come to get a trade-in value on their car."
CJ Jayasinghe, the CEO of Perth's Westside Auto Wholesale, told CarAdvice that while he'd seen steep rises in used car prices up to 20 per cent, "not all used cars have increased in value".
"I don’t think any of our models have increased to those highs. Maybe 20 per cent in the case of some models. [Otherwise] fleet set vehicles brought in mass by rental companies or businesses – like the ZB Commodore or Toyota Camry – have remained stagnant."
Paul Hopper of Victoria's Hopper Motor Group acknowledged "prices are definitely up", but contended "the broad market is probably 15-30 per cent up [at most] depending on the model".
"There will be examples of the high percentages but they're more aberrations – for example, the headline numbers in the V8 market can be influenced by the collectible element as people attempt to snap up a bygone era," Mr Hopper said.
Mr Hopper said the real growth has been limited to SUVs and light commercial vehicles, while some shoppers looking to buy "small automatic hatches" are looking at "almost new-car pricing".
"It's all driven by the new-car stock being very hard to get and it's pushing demand into used vehicles," Mr Hopper said.
"Our group is now starting to sell used batches of cars to fleet clients who'd normally buy new, but at the moment the stock isn't there."
What is certain is that price highs are attributable to dwindling new-car stock and limited used-car listings, with JP Morgan data from early February recording a deterioration in Carsales, dealer, private seller, new and demo car listings.
The data found Carsales listings had fallen by more than 25 per cent year-on-year in early February, while private seller listings were down by more than 50 per cent year-on-year.
New and demo listings also fell more than 36 per cent year-on-year as of early February 2021.
On a positive note, one worthy cause benefiting from this upswing is Melbourne-based charity Kids Under Cover, which runs a Donate Your Car program to raise funds for homeless youth.
"During the past 12 months, we have seen a significant increase in demand for used cars translating into increased sale prices for the cars we have been donated," Adam Walsh, Head of Fundraising, told CarAdvice.