The Covid-19 pandemic has had all sorts of impacts on the New Zealand motoring industry; from supply dramas, to sales model changes, to the speeding up of green-car legislation.
One of the other impacts has been the prices of second-hand vehicles. Numbers quoted earlier in the year indicated that the market had risen, on average, by some 8 per cent. Now, it appears to have increased even further.
According to TradeMe Motors Sales Director Jayme Fuller, the median online car sales price has jumped significantly over the last two years; from $9,974 in July 2019, to $11,000 in July 2020, to $13,494 in July 2021.
The quoted median price is based on the national average of sales, showing a 35 per cent lift in just two years and 23 per cent in just 12 months. It’s worth reiterating that this doesn’t necessarily mean that a car worth $9,974 in 2019 is now worth $13,494. Rather, the collective average is on the rise.
A car sold today for $13,494 may have sold for closer to $10,000 had our market been stable.
“Unusual market conditions as a result of Covid-19 have seen car prices skyrocket and in July, prior to the latest lockdown, the national median asking price jumped by 23 per cent in just 12 months,” says Fuller.
“Ongoing global shortages in the market have meant there has been a drop in supply of both new and used cars entering the country. When compared with the same month in 2019, prior to the pandemic, we saw a 27 per cent drop in the total number of cars listed onsite in July.”
Fuller suspects that this will become the norm for at least another year. While she notes that this represents a pressure on the market, Fuller adds that it also represents opportunity for Kiwis to cash in on the market’s demand.
“This combination of low supply and high demand has put enormous pressure on the market and is driving prices up. We’re not likely to see a change until the country’s used-car inventory returns to healthier levels, which is realistically not going to happen for at least another year,” Fuller added.
“Anyone will tell you that you start losing money on your car as soon as you drive it out of the dealership and traditionally cars have been well known to be depreciating assets. However, our latest data shows that’s no longer the case, with many Kiwis actually making money on their used cars.”
”With our borders closed for 18 months, many Kiwis are redirecting their overseas holiday funds to purchase big ticket items like a new car. In July we saw a 65 per cent increase in views and a 36 per cent increase in watchlists on used car listings onsite when compared with the same month in 2019.”