Used car prices have been on a rise in Australia for a very long time, however, what to expect in 2023? With the new car shortage, we may expect some change. Well, it’s wrong as it turns out. The last couple of years have seen the vehicle industry getting hotter than a vinyl singlet, due to a myriad of things, specifically Vocid-19. Quite obviously, the Covid pandemic has made the prospect of public transport for reduced palatable for many. We might have seen road trips, vanlife spike and off-roading getting popular.
What is even more important is the manufacturing of Covid wrought and disruption to global trade, the effects of which we are dealing with even now, such as the worldwide computer chip shortage. The short and the long of it is that used car prices are quite higher now, there has been a lack of new vehicles and people are flipping new vehicles for serious profits at incredible rates.
To understand the car industry, we have to look back to the initial days of the Covid-19 pandemic. Before the pandemic, the estimated average wait for a new car from ordering to driving it home was 32 days. But, with the global supply chain issues and lack of microchips, those waits blew out. A few months ago, the figure was 159 days or more than 5 months.
With the improvement in the supply chain, the average wait is now 151 days. The longer waits caused the price of used cars to rise since they can be driven away on the same day. So, would you want to wait for a new car for that long when you can drive a similar car right away? These are some of the factors that have made the prices go up. However, with the continuous improvement in the supply chain, we may expect that the car prices will go down in 2023.
The worst of the pandemic is now over and things are now getting back to normal. Also, the prices may start to simmer down. This was the working theory for many, but it has turned out to be unlikely. As long as the new car stock levels are challenged, there would be pressure on the car prices, and the outlook is still to be stock-constrained for many brands towards the end of 2023 and beyond as well.
It is a prognosis shared by different car dealers in Australia who are well aware of dealing with the lack of stock. In short, there is no need to be that quick to sell your vehicle while the prices are still higher since it is likely to remain the market for sellers for quite some time. So, this is bad news for those looking to buy a car. Therefore, to conclude, one can say that the prices may not go down in 2023. However, we may expect some reduction in prices!