Used car prices shoot up amid ‘perfect storm’ of supply issues

Aussies are paying staggering amounts for used cars as a perfect storm of factors drives long wait times for brand new vehicles.

Australians are paying staggering amounts for used cars as global supply disruptions squeeze local supplies.

In some cases buyers are paying tens of thousands more for used models rather than endure long wait times for new cars, according to some reports.

The availability of new vehicles is way down as the pandemic and factors including the conflict in Ukraine continue to hamper production.

Australians chasing the more popular brands and models of new cars face wait times of well over half a year with an average wait for Toyota, Isuzu and Land Rover models taking 6-9 months.

The longest wait currently is for the Land Rover Defender which takes 357 days to arrive, according to Price My Car.

Editor in chief at Carsales Mike Sinclair said in some cases buyers were also paying more for demo vehicles they could drive off the lot rather than wait for a brand new vehicle.

Aussies are paying more for used cars rather than endure lengthy wait times for new vehicles. Mario Tama/Getty Images/AFP

He explained the key factor driving used car prices higher was a “perfect storm” of interruptions affecting supply of new vehicles.

“You’ve got issues with Ukraine, issues with semiconductors worldwide, material issues, production challenges because of Covid and staffing problems because of that globally,” Mr Sinclair.

He added the price surges were disproportionately affecting the more popular used car models such as the Toyota HiLux and Landcruiser.

“Particularly with Landcruiser that’s still being driven by very long wait times for the new Landcruiser 300 series,” Mr Sinclair said.

“So if people want to sell their 200 series Landcruiser which has only recently been superseded then they're getting really good prices for them.”

He added that Aussies are tending to hold on to their old vehicles further constricting supply.

The popular series 200 Landcruiser is selling for more on the second hand market due to delays in the newer models.

Buyers are less likely to trade in an old car when they purchase a new one and appear to be preferring to expand the family fleet in order to maintain their own flexibility.

“They’re either not getting their new car as quickly as they’d like and they’re holding onto the trade in – or they’re keeping that car and maybe handing it down to a family member or moving it on privately between families,” Mr Sinclair said.

“Consumers have really voted with their feet in terms of wanting that personal transport and keeping their option open in terms of being able to use their own private car.”

The situation is expected to continue for the foreseeable future until new car production can recover.