May 23, 2024

The used car market in Australia is booming with a need for more vehicles. Dealers chase clients who have left to offer lucrative buy-backs as they race to fill their showrooms.

Some also search marketplaces and social media websites for people looking to sell their used vehicles privately.

In an email that was seen in The Guardian with the subject of “We want your Mazda3!” A New South Wales car dealer offered former customers to buy back the cars they had sold them years ago.

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“We will pay the highest price for your car and, even more importantly you’ll receive the cash on the same day! What’s better than this?” it said.

Others who attempted to sell privately were contacted directly by car-buying and dealer services after posting advertisements on Facebook or Gum Tree.

The used and new automobile market is experiencing a record demand due to supply chain problems.

Paris Lord, 45, from Canberra, claimed he was contacted by “a few” dealers before selling the electric Mitsubishi Hybrid 2017 Outlander in March of this year for $32,000.

Lord sold his home because there was no power outlet in the car park in the basement at his new residence, and he wanted to get rid of his car and said he was not worried about having a tiny loss from the sale.

Paris Lord received text messages from a dealership before the sale of his car, in 2017 Mitsubishi Outlander online. Photo: provided

“I was selling it privately for a reason and didn’t want their alleged service,” Lord stated. “One of the buyers took it for an initial test drive but would not increase their price. Usual palaver. “Aww, mate, it’s time to replace the tires,” and blah and blah.

“Their prices were way too low. I was certain they would hike up the price of their cars due to the lack of vehicles and other supply chain problems.”

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The director of motor vehicles used for Pickles auctions, Brendon Green, said prices are 150% more approximately $8,000-$10,000, compared to before the outbreak.

“Traditionally when a business, government entity, or private buyer receive a new car, they dispose of a used vehicle,” Green said.

“Due to the lack of vehicle turnover, our auctions are extremely competitive among dealers which has driven used car price up, so it’s no surprise they are getting creative when trying to source used vehicles.”

The result is that Australians must wait an average of 146 days to deliver a brand-new car.

According to Price My Car, the people who resided in Western Australia spent the longest on wait lists, with queues lasting 239 days on average, closely followed by Northern Territory. Northern Territory, where times are around 180 days.

One of the models that took the longest time to get to market included the Land Rover Defender, which has 357 days. Then, it is followed by the Toyota RAV4, which takes 293 days to reach.

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The co-founder of Price My Car, David Lye, claimed that car dealers had to become “very aggressive” and creative in their sourcing approach.

“Car dealers have embarrassingly empty showrooms, so they’re hitting the phones, hitting people up on Car Sales, so they can buy them directly,” Lye explained.

Lye stated that some dealers could discover “flexible” ways to inflate delivery costs. Still, their franchise agreements ensured they couldn’t offer a vehicle at a higher price than the retail value recommended.


He noted that most price slashing occurred in the private market, where sellers from private companies put up thousands of dollars higher than reasonable.

“There are plenty of instances of private buyers, regular Australians, buying a car, taking delivery, sticking it in their driveway, adding $20k to the price and putting it on Carsales,” Lye explained.

This week, Kia Australia said some customers were purchasing new EVs and then selling them instantly at a marked-up price, with numerous other customers left with nothing as waiting lists swell and the 100-plus vehicles are sold out within minutes.

“The major problem that we’re facing at the moment is the flipping of retail customers what they’re doing with the cars once they bought it,” Kia Australia chief operating officer Damien Meredith told the Driven.

“We’ve been told of people purchasing cars again, along the East Coast of Australia, the Sydney Metro and they’re turning up in Western Australia, with a price of anywhere from $8,000 to $10,000 for the vehicles. This suggests an exercise in flipping customers,” he said.

In January, the Australian Automotive Dealers Association (AADA) and other industry watchers believed that supply chain shortages would decrease and prices would begin to decrease between mid-2022 through the end of the year.

However, the ADAA head, James Voortman, said that the situation only worsened due to the increasing tensions in Ukraine that caused “highlighted some additional chinks in the supply chain.”

“We are hopeful the automakers can pivot and manufacture key components in other areas of the world, and still hopeful that the situation will start to improve by the end of the year,” Voortman stated.

“Right now we can’t even be honest with our customers about when certain models are arriving, there’s just too much uncertainty and, frankly, it’s been like this for almost two years now.”

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