Used-car prices ‘skyrocket’

Values of used vehicles have accelerated because of the coronavirus pandemic, according to latest data from Trade Me Motors. 

It reports the median asking price as increasing by 35 per cent since 2019 to hit $13,494 in July.

Jayme Fuller, sales director, says in the past year alone that the median asking price for a used car in New Zealand has jumped by nearly $2,500. 

“Unusual market conditions as a result of Covid-19 have seen car prices skyrocket and in July, prior to the latest lockdown, the national median asking price jumped by 23 per cent in just 12 months,” she adds.

The national median asking price for a used vehicle in New Zealand was $11,000 in July 2020 and $9,974 in the same month of 2019.

For the first time, Fuller says current market conditions have resulted in a phenomenon where Kiwis are selling their vehicles for more than they originally paid, despite adding more kilometres to their odometers.

“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. 

“However, our latest data shows that’s no longer the case with many Kiwis actually making money on their used cars.”

Fuller believes factors behind the increases include ongoing global shortages in the market resulting in a drop in supply of new and used vehicles entering the country. 

“When compared with the same month in 2019 prior to the pandemic, we saw a 27 per cent drop in the total number of cars listed onsite in July,” she says, adding demand has also taken off since the start of 2020. 

“With our borders closed for 18 months, many Kiwis are redirecting 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 on-site when compared with the same month in 2019.

“This combination of low supply and high demand has put enormous pressure on the market, and is driving prices up.”

Looking ahead, Fuller says it’s difficult to gauge how long it will take before the used-car market looks like it did pre-coronavirus. 

“We’re not likely to see a change until the country’s used-car inventory returns to healthier levels, which is realistically not going to happen for at least another year.”

Popular models

Prices have been impacted across the board with increases also seen in higher-value models.

“For cars over $15,000, the median asking price increased by 12 per cent in July when compared with the same month in 2019, while those over $25,000 saw an 11 per cent jump in the same period,” says Fuller.

Looking at the median asking price of the country’s most popular model, the Toyota Hilux, shows how much prices have shot up over the past two years. 

“In the past seven days alone, we’ve seen more than 136,000 searches for Hiluxes and it has long been New Zealand’s favourite vehicle.”

In July this year, Fuller says the median asking price of a 2016 Toyota Hilux, [an example of one is pictured for illustrative purposes only], was sitting at $39,490. 

“This marks a nine per cent increase when compared with the median asking price of the same ute in 2019 even though it’s now an older model.

“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. This will no doubt be playing a part in the price growth of this make.”

Fuller says two more of New Zealand’s most-loved models – the 2016 Ford Ranger and 2016 Mazda Axela – also saw year-on-year increases in value in July.

The only model to buck the trend out of the top five most-popular Kiwi models was the 2016 Suzuki Swift, which saw no price change compared to 2020.

At this stage, Fuller says it’s too early to say whether prices will continue to climb.

“As we come out of the latest lockdown, there is a bit of uncertainty going forward. But one thing is clear. There’s never been a better time for Kiwis to sell. Even if you don’t think the car you’re trading in is worth much, you may be pleasantly surprised.”