Used car prices are surging as Covid restrictions and a shortage of computer components hamper the global supply of brand new models.
The problem is getting so bad insurer NRMA is urging frustrated motorists to be extra careful and avoid panic buying a secondhand car, with older 4WDs now in demand.
Chris Emerson, a data specialist with NRMA’s parent company IAG, said buyers needed to stick to a budget instead of overpaying.
‘Your budget should include the maximum initial price that you’re willing to pay, as well as the ongoing costs of ownership,’ he told Daily Mail Australia.
A shortage of semiconductors coming out of Taiwan is hurting the supply of new cars, on top of Covid restrictions at factories.
Used car prices are surging as Covid restrictions and a shortage of computer components hamper the global supply of brand new models. Datium Insights data showed an 18 per cent surge in average used prices for a four-year-old Toyota LandCruiser. A 2017 model pictured
Parts of Asia are suffering from a severe drought and insufficient water is delaying the production of computer chips.
This is, in turn, slowing down car production with the components essential for vehicles’ electrical systems.
The ban on Australians travelling overseas for a holiday, beyond New Zealand, has also seen motorists increasingly turn to large 4WDs on the used market.
Resale values have surged for older Toyota LandCruisers with average prices for a four-year-old model climbing by 18 per cent since the start of the pandemic in February 2020.
This saw typical prices for a 2017 model climb to $56,700 in March 2021 from $47,900.
Plenty of LandCruisers from that era are being listed on Carsales with six-figure prices, with the top-of-the range Sahara model commanding top dollar.
A shortage of semiconductors coming out of Taiwan is hurting the supply of new cars, on top of Covid restrictions at factories
Datium Insights head of product Tanim Ahmed said buyers, frustrated with strong demand for three-year-old LandCruisers, were turning to a four-year old version.
‘There’s more sales happening for older Landcruisers now compared to younger ones which is likely due to these supply shortages we’re having,’ he told Daily Mail Australia.
‘Basically they’re depreciating much less over time then they used to.’
Average used car prices in Australia have soared by 37 per cent since the start of Covid, data from Moody’s Analytics and Datium Insights showed.
Mr Emerson said that made it even more important for car buyers to shop around.
‘Car prices and willingness to haggle can vary between dealers, so don’t be afraid to check and visit a few dealerships before making your purchase,’ he said.
CommSec chief economist Craig James said the overseas holiday travel ban caused rich Australians to put their money into cars instead.
‘Aussie consumers continue to treat themselves,’ he said.
The problem is getting so bad insurer NRMA is urging frustrated motorists to be extra careful and avoid panic buying a secondhand car, with older four-wheel drives now in demand
‘Except for New Zealand, the foreign borders are still closed, and that means that consumers are prepared to spend more on cars, domestic travel and other retail purchases in the current environment.’
A CommSec analysis of luxury car sales showed the 17 most prestigious marques had a record 12.56 per cent share of the overall passenger vehicle and SUV market in the year to March 2021.
Porsche sales were at a four-year high, with rolling annual sales of 4,457 in March – the highest June 2016.
The analysis tracked sales of luxury marques including Aston Martin, Audi, BMW, Bentley, Ferrari, Hummer, Jaguar, Lamborghini, Lexus, Lotus, McLaren, Maserati, Maybach, Mercedes-Benz, Morgan, Porsche and Rolls Royce, with the information sourced from the Federal Chamber of Automotive Industries.