By Zach Hope
Mechanics are experiencing their busiest months on record and dealerships have “more customers than cars” thanks to a run on second-hand vehicles from people desperate to hit the road and unwilling to wait for new overseas imports.
Australians are paying almost 40 per cent more for used cars now than they were in pre-pandemic 2019 and the demand, particularly for SUVs, commercial utes and city runabouts, continues to strengthen with no end in sight.
“I’ve never seen anything like it,” said Bill Assaad of Preston’s ANS Car Sales. “It can’t keep going like this. It’s ridiculous.”
Prices collected from auction houses and dealerships by data aggregation firm Datium Insights showed the coronavirus price fluctuations have been far more pronounced than the world’s most recent “black swan event”, the Global Financial Crisis of the late 2000s.
Prices crashed about 15 per cent in the first months of the pandemic because of trading restrictions and uncertainty, Datium Insights analyst Tanim Ahmed said.
Customer Miguel Mendoza getting instructions for a test drive from ANS Car Sales dealer Bill Assaad.Credit: Jason South
“But after that shock, when trade started to resume again, the stock of new cars [from international manufacturers] was so restricted people were limited in what they could buy and that demand spilled over into used cars. That’s an effect that’s still happening today,” he said.
Demand was compounded by fear of public transport, which explained the popularity of small hatches, and Australians’ desire to explore their own country in the indefinite absence of international travel options, he said.
Mechanics have also experienced a surge in business from people needing pre-purchase inspections and roadworthy certificates for their new rides. Customers holding off on new car purchases had also turned to mechanics in droves to keep their existing cars running and give them confidence to travel.
Business was particularly strong in Victoria in the lead-up to Christmas because so many vehicles were due for service during the months-long lockdown.
“As soon as we came out of that second wave, well, Jesus Christ, it was just catch up. It was unbelievable,” said Eddie Mitchem, service manager of Cox Auto Service Centre in South Melbourne.
“We’ve never experienced that since we’ve been here, I’ll be honest with you. It’s with everything: motorbikes, cars, jet skis – everything.”
Calls had only started to ease in the last several weeks, he said.
Stella Mobile Mechanics owner Richard Brown said he was booked solid for weeks and was having to politely turn many new customers away.
Mechanic Richard Brown is booked out for weeks because of the unprecedented run on used cars. Credit: Jason South
“When I can, I try to help people with free advice over the phone or by referring them, but effectively we’ve had to say ‘how does the first week of March sound?’ But more often than not, people need it right there and then,” he said.
For the first time since going solo almost four years ago, Mr Brown was actively looking to hire another mechanic and van.
Mr Assaad of ANS Car Sales said January was one of the busiest months in the business’s history. But he added business conditions were not as good it they might immediately appear.
“It would be if we could get our hands on more cars,” he said.
“It’s gone through the roof and we’re finding we’ve got more customers than cars at the moment.
“We’ve always been able to buy heaps of cars at the right money, but at the moment we’re finding it very hard. A car we were paying $4000 for before is now $6000.”
Customers were only willing to pay so much, he said, and this had squeezed the yard’s margins.
“Another issue is, if dealers fill their yards up with overpriced cars and then something changes, they’re going to be stuck with cars that are too dear to sell,” Mr Assaad said.
Mobile mechanic Mr Brown said the market would probably stabilise once foreign imports returned to normal levels and more of the world’s population was vaccinated.
At ANS in Preston, Miguel Mendoza was getting in before prices could rise any further.
“The dealerships I’ve been too, they’ve all been happy to negotiate a good price,” he said.
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