Aussie car prices set to crash

It could be a great year to buy a car in Australia, with prices expected to plummet due to several crucial factors.

2025 looks set to be a great year to buy a car – but don’t expect a good trade-in price on your last set of wheels.

Experts are predicting this year will be a buyers’ market as Australia battles with an oversupply of used cars.

The last couple of months show demand for used cars continues to cool compared to the peaks seen during the COVID-19 pandemic.

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Photo of the Nissan X-Trail, Kia Sportage and Toyota RAV4. (Picture: Thomas Wielecki)

Data compiled by Auto Grab and published by the Australian Automotive Dealers Association (AADA) shows used car sales have continuously fallen for four months.

In December, there was a total of 322,532 active listings, a drop of 3.8 per cent on November 2024.

However, out of the 322,532 active listings only 181,724 cars turned into sales, equating to a 56.3 per cent sell-through rate.

“Average days to sell have increased to 48.7, the highest since October, suggests that sellers are dealing with slower moving stock,” AADA chief executive James Voortman said.

“This trend is expected to continue in 2025 as the growing oversupply of new vehicles creates a spillover effect into the used car market,”

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Hyundai Ioniq 5 N, Hyundai Santa Fe, BYD Shark 6. Picture: Thomas Wielecki

The AADA noted oversupply of new vehicles was pushing down retained values, with every vehicle segment across every age category experiencing a drop in value, with the exception of LCV-Utes in the 2-5 year age categories.

The average days to sell a used car in December increased to 48.7 which was up from 47 in November but still below December 2023’s 50.9-day figure.

In the final month of 2024, the Ford Ranger retained the crown as the best-selling used car with 4,992 units sold.

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2025 Ford Ranger Stormtrack PHEV. Photo: Supplied

The oversupply of new electric vehicles is also having an impact on the second-hand market with listings dropping 4.1 per cent and sales falling 3.3 per cent in December.

In the EV market, the MG MG4 regained the top spot as the best-selling vehicle, overtaking the Tesla Model 3.

As we reported in January, Cox Automotive Australia corporate affairs manager Mike Costello said EV values were affected by “lingering consumer and retailer concerns over EV residual values, charging infrastructure, and battery costs and longevity – some justified, others less so”.

Soft used process will be driven by weak demand by some sectors of the new car market.

Federal Chamber of Automotive Industries chief executive, Tony Weber, said that new car interest in December fell to “very low levels as interest rates and general cost of living pressures impacted Australian families”.

The MG4 electric car.

Originally published as Aussie car prices set to crash