Used cars are costing a staggering 65 per cent more than pre-Covid levels, new data has revealed.
Statistics from financial intelligence group Moody Analytics also show second-hand car prices have climbed 18 per cent on what they were at the end of 2021, with the Covid-19 pandemic pause in manufacturing continuing to hit the hip pocket.
Drive Magazine content director James Ward told 9 News that used-car market conditions were unprecedented.
“We’ve never seen anything like this … it’s bananas,” Mr Ward said.
“You’ve got ridiculous waitlists on even regular cars, 12-to-18-month wait times.
“Seeing used cars go up in value is also something we’ve never, ever seen.
“In many cases, you’re able to sell a car that’s 18 months old for basically what you paid for it.”
Victorian man Dan Baxter told 9 News that he sold his ute on Facebook Marketplace – a popular platform for selling used items – for only $1500 less than what he bought it for eight years ago despite notching up another 55,000km on the odometer.
“I bought the 2008 Toyota HiLux in 2014 for $22,000 with 170,000km,” he explained.
“I sold it in February 2022 for $20,500 with 225,000km.”
Mr Ward called for caution as the car market continues to heat up, with pundits expecting the manufacturing lag to clear up within the next 18 months.
“With second-hand cars, we’re seeing these massive discrepancies between what is the sort of value you would expect to pay and what people are asking for,” he said.
“Drivers should be very cautious against paying more for a car than they really should be, particularly with interest rate rises going up.
“Because if the market corrects, you’re going to be in a really bad state.”
“Don’t pay over the odds
“If you’re looking at buying a car that feels expensive for what it is, don’t do it. ”
Mr Ward is hopeful interest rate hikes will restrict motorists’ borrowing power and lead to reduced demand as manufacturers catch up, lowering prices over the next year-and-a-half.
Moody’s Analytics forecasts prices remaining high in the “near-term”.