COVID-19 pandemic fuels used-car bonanza

Used-vehicle prices have soared during the COVID-19 pandemic as Australians shun public transport and ride-sharing services.

Used car prices have soared. Picture: Kevin Bull

Used-vehicle prices have soared during the COVID-19 pandemic as Australians shun public transport and ride-sharing services.

Moody’s Analytics Price Index revealed used-vehicle ­prices surged 7 per cent last month, and are now 25 per cent higher than August last year.

It comes as public transport use has slumped 60 per cent since January, before Australia’s first COVID-19 infection.

“Consumers have opted for personal transportation in place of ride-share services or public transportation,” Moody’s senior economist Michael Brisson said.

“This change in preference has been in response to fear of contracting the virus or, in some cases, not wanting to deal with the hassles of increased precautions.”

At the same time, Mr Brisson said the supply of used cars had tightened, elevating prices.

“Supply concerns continue to hamper the auto market. Dealerships have complained about not having enough inventory coming into port,” he said.

“Additionally, leases were extended during the early days of the lockdown. Those vehicles have not yet made their way back to the market. Further, banks are still forgoing repossessions, limiting another avenue for vehicles to make it into the wholesale market.”