New cars typically drop in value the second you drive them out of the showroom but persistent supply chain constraints have seen some models selling for more than they were bought for.
Also read: Dealer's choice: How to buy a car now
Also read: What to expect in the 2022 used car market
Also read: Supply and support key for electric cars
A global shortage of computer chips has slowed car manufacturing, leading to wait times as long as 12 months for some models.
Impatient buyers have turned to the used car market, which has driven up prices for some high-demand used models that are only a few years old.
Private Fleet managing director Nicholas Crawshay said the increased demand had boosted used car prices by up to 40 per cent.
He said buyers with “the luxury of time” are selling their one or two-year-old car privately while placing an order for the equivalent new car at no extra cost.
“They are getting more for their existing car than they pay for a brand new one,” Crawshay said.
Should I be selling my wheels?
Technically, you could sell your appreciated car and keep the change.
But forget trading it in for an upgrade unless you are prepared to wait the six-12 months for factories to catch up on their orders.
A Nissan Patrol, for example, has an expected wait time of 228 days, according to data from Price My Car. The longest wait time is for a Kia Carnival at 243 days, with Western Australia experiencing longer delays than any other state.
However, if you are looking to offload a car for good, now would probably be the time to do it depending on the year and model.
The used car market is off the charts
In the 35 years he’s been selling used cars, Shayne Hennessey from Awsum Motors in Western Sydney has never seen the market so hot.
“It’s just been constant for the last 18 months to two years,” he said.
While he sells lower-value cars that have been less affected by the manufacturing bottlenecks, he said his peers were seeing high-demand cars such as the Ford Ranger going for nearly as much as the 2021 models even if they were five years old.
Spiro Christopoulos of Melbourne used car dealership Cars of Melbourne said relief for the car market was “probably a good year away”.
“It’s a worldwide shortage that’s influencing the simple economics of supply and demand,” Christopoulos said.
He added that despite inflated prices for used cars, dealerships were making similar margins to pre-pandemic times because they were also paying higher prices for their stock.
“It’s actually harder trying to sell at a higher price,” he said.
“Consumers have been accustomed to a bargain and haggling for lower prices … that side of things is now disappearing.”