The price of used cars in Australia continues to skyrocket due to the supply chain pressures plaguing carmakers.
Moody’s Analytics reports used passenger car prices grew by 18 per cent in the first quarter of 2022, while commercial vehicle prices grew 16 per cent compared to the same period in 2021.
The wholesale prices the Australian used-car market is currently experiencing are up 65 per cent on pre-pandemic levels.
The same factors forcing new-car buyers to wait up to 12 months for some in-demand models are behind the spike in used-car prices.
Ongoing shortages of semiconductors, lockdowns caused by COVID-19 in China, and the war in Ukraine are wreaking havoc on the automotive supply chain.
With fewer new cars available to buyers, they’re turning to the used market. The lack of new-car sales also means fewer vehicles are being traded in or privately re-sold, further driving up prices.
Finally, Moody’s Analytics says “buoyant economic conditions and higher household discretionary spending are also fuelling demand for used cars”.
The devastating floods in Queensland and New South Wales saw around 22,000 cars written off, forcing more people to try and buy vehicles in an already undersupplied market.
There’s no sign of when the supply chain will be corrected. Although the impact of COVID-19 is likely to recede over the coming months, war in Ukraine has already forced a number of carmakers to suspend production.
Along with wiring harnesses, Moody’s Analytics reports Russia and Ukraine supply half the world’s semiconductor-grade neon, a shortage of which could further compound the global chip crunch.
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