Coronavirus: Second-hand car sales rebound driven by people seeking alternatives to buses, trains

Commuters are shunning public transport due to COVID-19 restrictions and powering demand for previously owned vehicles.

Sydney traffic started to pick up this week as schools went back. Picture: Matrix

Commuters are shunning public transport due to COVID restrictions and powering demand for used cars, say dealers who are becoming cautiously optimistic as buyers return to showrooms.

Used car sales are outstripping demand for new vehicles and dealers remain concerned that the rebound is a “bubble” caused by short-term stimulus measures.

Anthony Altomonte of the Alto Group, with multiple brands from Audi to Toyota centred on Sydney’s north shore, says younger buyers are looking for alternatives to buses and trains.

“Used vehicles have really taken off – much stronger than new cars – and actually better than pre-COVID,” he said.

“It’s a lot of first-time younger buyers. In the past they would have caught the train or the bus – they’re now planning to drive.

“The comment we’re getting is, ‘We’re not getting on public transport for a long time.’

Phillip Mance, dealer principle of Alan Mance Motors in Melbourne, said this week roads were getting busy again and agreed demand for second-hand vehicles was strong.

“Used cars are popular – not expensive cars, under $20,000, under $10,000 – is going off.”

The instant asset write-off scheme, which has increased limits to the end of June, was also driving inquiry on commercial vehicles.

“Plumbers and builders haven’t stopped in Victoria so that’s OK. But the retail side of it for new cars is still very quiet. We’re a week or two behind NSW.”

Many drivers had been confused by the rules and just stayed away.

“We’ve had people not bring their car in for a service because they didn’t think they were allowed to,” he said.

Sales staff return to full time next week but he was concerned that when JobKeeper stops in September, demand will suffer.

Wade von Bibra of the Gold Coast Von Bibra dealership group said recent demand was “solid” with stimulus measures working to return confidence.

Although service, parts and administration were still on part time, showroom staff were back and buyers were returning.

“Used cars are performing really strongly for us and our new car brands – Nissan, Honda, Mitsubishi, Subaru, Suzuki – volume brands, were a bit later to catch on.”

Strong offers were bringing family buyers into dealerships and he expected fleets to take advantage of the asset write-off scheme in the run-up to the end of the financial year.

“It’s early days and it’s hard to ascertain whether it’s just a little bubble because people have been cooped away for so long or whether it’s sustainable.

“We’ve also got to bear in mind it’s our strongest time to sell cars being the end of financial year.”

“I hope it’s a sign of things to come, I’m really positive, but it’s one day at a time.”

One regional NSW multi-franchise dealer warned that once the asset write-off scheme stops “July might fall into a hole”, but in the meantime sales had almost returned to normal.

“We’re back at 60-70 cars a week now – that’s what I used to do pre-Covid,” he said.

“We’re back at full speed but it’s not all new cars. Used cars have gone up the most – about 50 per cent.”

“I wonder if the used car side of things is pent-up demand.”

Australian Automotive Dealer Association CEO James Voortman expected the rebound to be reflected in new car sales figures for May, due next week.

But he cautioned that it was still early days.

“Nothing’s ever going to be worse than April! But I’m not going to declare victory because it might just be two good months, a bit of pent-up demand.

“The time to be scared is when JobKeeper runs out.”