Used Car Market Booms but EV Prices Take a Hit

Recent heavy discounting in the electric vehicle market is beginning to take a toll on resale values, a report has found.

Electric cars aren’t holding their value as well as hybrid vehicles, according to a report from the Australian Automotive Dealer Association.

The AADA’s mid-year Automotive Insights Report reveals that two-year-old electric vehicles are worth 22 per cent less than they cost new, while two-year-old hybrids are fetching more than they originally cost.

The report found that most of the drop in value happened in the first year of ownership. While one-year old hybrids command a 3.5 per cent higher sale price than their original retail price, EVs depreciated by 17 per cent. Depreciation is the biggest cost of owning a car.

The result follows deep discounting by leading players in the EV market, which has dented the resale value of late model used EVs.

The report says that sales of used hybrids and electric vehicles have jumped by about 80 per cent in the first half of 2024 due to increased supply.

AADA chief executive James Voortman said the numbers reflected consumer caution about electric vehicles.

“The growth in used hybrids and EVs is a sign of changing consumer preferences, but the depreciation in EV values suggests there’s still some hesitation in the market,” he said.

Overall, the report revealed a big uptick in used car listings and sales in the first half of this year.

A report from the Australian Automotive Dealer Association and AutoGrab reveals the used car market is booming with listings and sales up. Photo: Supplied

In good news for used car buyers, who have had to pay record high pries since the pandemic, 1.21 million used cars were listed for sale in the first six months of 2024, up 25 per cent on the same period last year.

The surge is largely driven by record-high new car sales feeding into the used car market and an increase in supply.

Voortman said the surge in listings has seen used car values decrease across every vehicle segment.

“National weighted average retained values for utes are down 11.8 per cent, SUVs down 8.2 per cent and passenger vehicles experiencing the smallest decline, down 5.9 per cent.

“There is a clear trend of improving used car supply resulting in lower prices which in turn has led to higher sales,” he said.

Voortman said it was “a great time to get a deal on a used car”.

“I believe we will continue to see a healthy level of supply of used cars and this will keep downward pressure on prices,” he said.

Interestingly, there’s a clear shift towards private sales.

According to AutoGrab Dealer listings are down and private sellers are moving cars quicker. Picture: Monique Harmer

According to AutoGrab Chief Commercial Officer Saxon Odgers dealer listings are down 7.5 per cent with private market share rising to 67.5 per cent compared with 59.9 per cent last year.

Private sellers are also moving cars quickly, taking an average of 13 fewer days to sell compared to dealers.

Dealer sales remain steady. The average time to sell a vehicle is holding at 50 days.

As for the top players, Toyota leads the used car market with nearly 17 per cent market share. The Ford Ranger remains the best-selling used vehicle with 38,804 units sold year-to-date, followed by the Toyota HiLux with 34,736 units sold.

Originally published as Used Car Market Booms but EV Prices Take a Hit