Moody's Analytics' used car price index indicates used vehicle prices are 25% more than they were a year ago.
This is despite new car sales experiencing 29 continuous months of sales declines.
Moody's Analytics, which tracks prices on car auction site Pickles' wholesale market transactions, found prices increased 7% in August alone, up from 4.7% in July.
This coincides with Gumtree reporting a 19% surge in used car searches.
Moody's Analytics auto economist Michael Brisson says this is also a global phenomenon.
"The rapid increase in prices for used vehicles due to COVID-19 is not only an Australian phenomenon. It is happening in developed countries across the world," he said.
"The ute segment, which includes SUVs and light trucks, has increased by 32% from the previous year and the wholesale passenger-car market increased by 23% during the same period."
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Similar interest is seen in the new car sales space, with light commercial vehicles and SUVs making up more than 70% of new sales in August.
However, the used price surge could be short-lived according to Mr Brisson.
"Used-vehicle prices will likely move sideways over the remainder of the year," he said.
"Price gains will slow as supply increases with sellers seeking to take advantage of the high prices and COVID-19-related demand gets wrung out.
"Stress in the labor market will continue to cause consumers to worry about their jobs and the economic recovery.
"This may limit demand in the coming months, lowering prices."
Moody's Analytics' research also reports that public transportation uptake is 60% below January levels, while driving routes searched are down just 10%.
The research also highlighted that as petrol prices decrease (which was seen earlier in the year), demand and prices for used 'trucks' increases (below).
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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