Dealer used selling prices still declining despite good volumes – a deep dive into October’s market
Sales and supply of used cars in Australian dealers remain at or around their highest points since before the pandemic, as average prices fall back to their lowest since January 2021.
Meanwhile, four-in-10 of dealer-used vehicles sold in October 2024 were discounted between listing and sale, by an average of 7.0 % per vehicle, pointing to a degree of disconnect between valuations and pricing.
As has become a familiar pattern, passenger cars (hatchbacks and sedans principally) maintain more elevated pricing on the Cox Automotive Dealer Delisted Price Index than SUVs and light commercials, and older stock likewise retains more inflated pricing than younger cars.
The latest retail used data comes from Cox Automotive Australia (CAA), which makes and supports dealer retail software including inventory and customer lead management platforms, and website design. CAA tracks a majority of vehicles listed in Australian retail dealers in any given month.
October used vehicle sales in the CAA database were up 11.8 % year-on-year (YoY), with total sales the second highest for a calendar month in four years – trailing only August 2024. Year-to-date used car sales are up 9.6 %, while year-to-date inventory has increased by about 5.0 % as cars enter the market.
Average selling times across all vehicle types are between 40 and 41 days per vehicle, while average Market Days’ Supply is 63 days, down 3.7 % YoY – suggesting demand has outpaced supply to a small degree.
The biggest-selling used cars for October were the Ford Ranger (up 2.4 % MoM), Toyota HiLux (down 2.5 %), Toyota RAV4 (up 9.1 % as supply replenishes after years of shortages), Toyota Corolla (up 0.5 %), and Hyundai i30 (down 6.4 %, as expected given declining sales in the new market).
The CAA Price Index ended October at 128.2, down 7.0 % over the last 12 months and down 1.0 % over September. This number means an average market wide price increase on used cars of 28.2 % over December 2019, the Index’s baseline, a period nearing five years.
Average used car selling prices in dealers are now 13.2 % lower than they were at the market’s peak in August 2022, when the Price Index hit 148.1.
There are discrepancies when it comes to vehicle types here, as there have been for a few years. Passenger vehicle supply is not as robust as SUV and ute supply due to what’s been happening in the new market over the past decade, therefore average prices here remain more elevated.
Over the past 12 months dealer inventory of used hatches, sedans and wagons is up only 0.3 %. Over the same time, the inventory of SUVs is up 7.7 % and Utes are up 11.7 %. It’s clear where the growth is coming from.
To that end, the respective Price Indexes for vehicle types are not the same. Passenger Cars have an Index 140.5, so 40.,5% more elevated than their December 2019 levels. Meanwhile SUVs are 121.3, Utes are 128.1, and EVs & PHEVs are 107.9 – the latter with a lot of volatility due to smaller sample size.
To give this added context, the average selling price of a 2–4-year-old Passenger Car has declined from $37,232 to $36,902 over the past 12 months, a drop of 0.9%. Over the same period the average selling price of a 2–4-year-old SUV has declined from $46,571 to $41,033, which is a much starker 11.9%.
Meanwhile, supply of second-hand EVs and PHEVs is up 43.6 % YoY, and sales of second-hand EVs and PHEVs are up a robust 51.9 % – though these electric vehicles still only account for 0.4 % of the overall used market. We expect this to change quickly from 2025.
In terms of vehicle ages, we see more elevated Price Indexes on older brackets compared to younger ones, likely due to the two-fold impact of demand for older cars amidst household economic challenges, and plentiful new car supply driving discounts, which knock onto late-model used vehicles in predictable fashion.
Average prices of all used vehicles aged under 2 years are up only 6.7 % over December 2019 (106.7 on the Price Index), whereas prices for 2–4-year-old vehicles are up 17% over this period, 5–7-year-old cars are up 23.7 %, and 8–10-year-old cars are up 39.6 %. The older the car, the stickier the pricing.
Another way to look at changes in used prices is to track average residual value (RV) returns, expressed as the percentage of the original RRP before on-road costs that a used car sold for. There has been a significant decline in this metric across all vehicles since the mid-2022 market highs.
For instance, the average RV of a 2–4-year-old Passenger Car has fallen from 90.7 % of RRP in October 2022, to 78.4 % in October 2024. For SUVs these respective figures are 91.2 % RV (October 2022) to 77.4 % RV (October 2024).
“The dealer used car market right now has seen monthly Price Index declines for 20 of the past 21 months, with average selling prices down to early 2021 levels,” said Cox Automotive Australia corporate affairs manager Mike Costello.
“Both used car sales and dealer inventories have spent the past few months at their highest levels since the beginning of the COVID period, with prices coming back to the highest degrees on younger vehicles, and SUVs which are in better supply, due to their huge popularity in the new market.”
“It’s pleasing to see significant uptick in supply of, and demand for, used EVs and PHEVs as well, with the figures up 43.6 % and 51.9 % respectively over the past 12 months. With the first large wave of new EVs hitting the market in 2022, we expect to see a lot of growth in this sector from 2025.”
The expected residual value on 2–4-year-old used EVs sold in the past six months is around 62 %, compared to almost 80 % for ICE passenger cars and SUVs, Costello noted. This is an issue that won’t go away any time soon, and one of key interest to the fleet market in particular.
About Cox Automotive Australia
Cox Automotive Australia is a subsidiary of Cox Automotive US, the world’s largest automotive services and technology provider.
Our local team of almost 600 people works with 26 automotive OEMs, as well as an array of automotive dealers and with the private and public fleet sector. Our parent company has 29,000 employees on five continents and a family of trusted brands that operate across the globe.
Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with $22 billion in annual revenue working in multiple industry sectors.
Our brands in Australia include Manheim Auctions (passenger, industrial and salvage), Kelley Blue Book, Sell My Car, and digital retailing solutions including LeadDriver and Xtime – an aftersales customer management platform used by several of Australia’s top OEMs in their dealer networks.
Manheim holds in-person and online wholesale vehicle auctions across Australia and New Zealand, with unique auction driving lanes in Melbourne, Brisbane and Sydney. Moreover, Manheim is a major salvage company for the insurance sector, and a major heavy industrial auctioneer.
For further information, please contact:
Mike Costello – Corporate Affairs Manager
M:+61 405 321 807 | E: mike.costello@coxautoinc.com
Read the latest full Market Insights Report Jul- Sep 2024 here
Definitions
Used Car Price Index
The Price Index tracks the movement of transaction prices relative to December 2019. It was created by taking the sold price of the used vehicles (from Dealers for the Retail Index or through Manheim auctions for the Wholesale Index), adjusted by the original Recommended Retail Price (RRP) when the vehicle was bought brand new, and volume weighted.
The base period is December 2019 with a value of 100 points. For example, an Index of 144.2 in May 2023 indicates that overall, the sold price has increased by 44.2% compared to December 2019.
Note that in calculating the index, the following vehicles are excluded:
- Brand new or heavy commercial vehicles;
- Vehicles that have travelled more than 60,000 km per year;
- Vehicles with more than 300,000 km;
- Vehicles less than two years old or more than 10 years old (for the Manheim Wholesale Used Car Price Index);
- Vehicles over 15 years old (for the Retail Dealer Used Car Price Index).
Active Listings
Level of dealer used and demo car stock in the reporting period. Active Listings represents a significant portion of used vehicle inventory advertised by Dealers nationally at the end of June 2023.
Sold Vehicles (Delisted)
Total Year-to-Date number of Dealers’ Used & Demo Vehicles delisted from advertisement in the reporting period which is assumed as sold.
Market Days Supply
Measuring the Supply & Demand dynamic by dividing the total number of Used Active Listings by the total number of vehicles sold within the last 45 days. 70 days MDS is the industry benchmark. MDS higher than 70 indicates over supply and vice versa.
Days to Sell
Dealers’ Demo & Used – Average Days to Sell measures the duration (in days) between when a vehicle was first advertised to when it was sold.
