Covid-19: Vehicle shortage pushes price of used cars higher on Trade Me
Wednesday, 29 September 2021
People are paying more for used cars thanks to an ongoing shortage of vehicles as a result of Covid-19, according to Trade Me Motors.
The median asking price on Trade Me rose 23 per cent in the year to July 2021, to $13,494, and it was up 35 per cent since July 2019, when it was $9974.
Owners were selling their vehicles for more than they paid thanks to supply shortages and an increase in demand, said Trade Me Motors sales director Jayme Fuller.
“Anyone will tell you that you start losing money on your car as soon as you drive it out of the dealership and traditionally cars have been well known to be depreciating assets.
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“However, our latest data shows that’s no longer the case, with many Kiwis actually making money on their used cars,” Fuller said in a statement on Thursday.
A 2017 study found that new cars sold in New Zealand depreciated more than anywhere else in the world, falling 53.67 per cent in value within four years
There were 27 per cent fewer cars listed on the site in July than the same month in 2019, Fuller said. At the same time, demand had risen since the start of the pandemic.
”With our borders closed for 18 months, many Kiwis are redirecting their overseas holiday funds to purchase big ticket items like a new car.
“In July we saw a 65 per cent increase in views and a 36 per cent increase in watchlists on used car listings onsite when compared with the same month in 2019.”
The price of three out of four of the most searched-for vehicles continued to increase, she said. By July 2021, the median price of the 2016 Toyota Hilux had risen 13 per cent since July 2020 to $39,490.
“We’re also seeing Kiwis flock to buy a Hilux before the Government’s Clean Car scheme comes into effect next year, and they face extra charges on utes,” Fuller said.
“This will no doubt be playing a part in the price growth of this make.”
Under the scheme to encourage the uptake of low and no emission cars in New Zealand, high-emitter fees will be based on a sliding scale of CO2 emissions from 192g/km of CO2 and up, so will vary from vehicle to vehicle, and even on different models of the same vehicle.
The maximum charge a high-emitting vehicle will attract is $5175 for a new vehicle or $2875 for an imported used one.
The 2016 Ford Ranger and 2016 Mazda Axela also saw an increase in value since July 2020, with the Ranger up 9 per cent to $40,567, and the Axela up 8 per cent to $19,836.
The 2016 Suzuki Swift was unchanged at $12,852.
Used car inventory was unlikely to improve for at least another year, Fuller said, but it was too early to tell if car prices would keep climbing.