Used car prices fall as Chinese brands and EVs lose value faster
- Used car prices are 6.5% lower than a year ago
- Chinese-brand vehicles lost value faster than comparable rivals
- Affordable EVs doubled their share of the used EV market
- Cars priced below $20,000 are selling quickly
Aussies looking to upgrade their car could score bigger savings on the second-hand market after the inaugural Used Car Market Report revealed used vehicle prices were 6.5% lower in September than a year ago.
The report, released by pre-owned car retailer Carma, found an influx of Chinese-brand vehicles and more affordable electric cars are helping push prices down.
"Household budgets remain tight, but the used car market has adjusted to meet buyers," Carma co-founder and CEO Lachlan MacGregor said.
Private listings of Chinese-made vehicles such as MG, BYD and Haval flooded the market, surging 58% over the past year,
By comparison, the broader used-car market saw a 13% growth.
See also: Used Car Loans Available in Australia
Chinese cars lose value faster
Carma found Chinese-brand vehicles priced between $20,000 and $35,000 have been losing value faster than comparable cars, falling 11.1% year-on-year.
By comparison, non-Chinese cars of comparable value fell 8.7%.
"For buyers, that can mean a much bigger gap to new," Mr MacGregor said.
A two- to three-year-old MG HS, for example, was selling 45.9% below the drive-away price of a new model.
Affordable EVs gain traction
The report also found electric vehicles are becoming more accessible for buyers seeking a cheaper entry point to EV ownership.
Used EVs under $35,000 doubled their share of the second-hand EV market from 13% to 26% over the year.
According to Carma, nearly half of those (580 of 1,288) were near-new dealer demonstrators rather than privately owned cars.
Tesla models held their value relatively well, falling 4% year-on-year, while non-Tesla EVs depreciated by 9.8%.
Depreciation across the EV market sat at 6.5%.
Despite the lower discount compared to other EVs, used Teslas were still more in demand, with the Tesla Model Y taking an average of 48 days to sell, compared with the average 85 days for dealer-listed used cars.
See also: What to know about buying a used electric vehicle
Budget used cars return to favour
Sub-$20k vehicles are attracting renewed buyer interest, according to Carma findings.
It found 62.5% of cars listed under $20,000 in July were off the market within a month, while prices in the category were 6.9% lower than a year ago.
Popular family vehicles were among the biggest bargains, with used Nissan X-Trails down 14.3% and Subaru Foresters down 11.6% year-on-year.
Carma also found nearly two in three dealer-listed cars sold in September had their price reduced before selling, with a typical reduction of about $1,500.
"The market is clearing at more affordable levels, and well-priced stock moves fast," Mr MacGregor said.
See also: Buying a car via dealer or private seller
But some models still fetch near-new prices
Across 70 popular models, a typical one-year-old vehicle sold for 14.8% less than its new-car drive-away price, an average saving of $7,399.
However, models facing supply shortages such as used Toyota LandCruiser Prados were listed for almost the same price as a new vehicle.
On average, buyers saved just $667 by choosing a one-year-old LandCruiser Prado over a new model.
Carma director of buying Peter Willis said shoppers should compare used-car prices against current drive-away offers and consider ongoing ownership costs before making a purchase.
"Steeper depreciation on late-model Chinese vehicles and non-Tesla EVs hitting sub-$35,000 price points create great entry points, but you have to act fast," he said.
See also: How to navigate the used car market
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