Used car prices: Is 2022 the right year to buy pre-loved?

Over the pandemic used car prices have skyrocketed across Australia. So what does that mean for 2022? 

According to new data from Allianz, 85% of Australians are looking to the used car market to save money because they can’t afford a new car. However, as per prices right now, the second hand vehicle market could be a hard egg to crack as well. 

In fact, analysis from vehicle comparison site Carsguide found that used car prices across websites like Gumtree, CarsGuide and Autotrader have gone up significantly over the past year. In December of last year, it found that: 

And according to the same analysis by Carsguide, there was no change in average costs on these car sale sites between 2019 and 2020. This shows how the semiconductor chip shortage that slowed down the new car market in 2021 (and still continues to do so), helped push second hand prices upwards. 

So, is now the right time to buy a secondhand car? 

Well, that’s up to you. 

In the current state of the market, used prices remain high which mean you may not be able to secure yourself a solid deal. 

However, with higher vaccination rates across the world and the stress on the semiconductor supply chain showing signs of easing, more new cars may become available in 2022 which may drive second hand car prices back down. 

So, when it comes to the question of “is now the time?”, it all depends on how urgent it is that you need to buy a car. On the one hand if you can hold off to see how the market plays out, it may be a good idea. Alternatively, if you need to upgrade your vehicle now ensure you do your research, shop around and get ready to haggle. 

Interestingly, Allianz revealed that a massive 32% of Aussies who bought pre-loved vehicles believed they drove home a ‘lemon’, while 20% claim to not have had a positive experience buying second hand.  

With that in mind, here are Mozo’s 5 top tips for buying a used car in 2022: 

1. Do your research: Compare car prices, makes and models and find what you want and can afford. If a car’s price seems too good to be true, put your cautious hat on and be prepared to walk away if something seems fishy. 

2. See the car in-person and take a test drive: Virtual or online purchasing of a used vehicle isn’t a savvy move. Make sure you meet the seller, have a thorough look at the interior and exterior of the car, and take it out for a spin. That way you can identify any issues and get a feel for how it drives. 

3. Conduct all the necessary checks: From mechanical checks to going through the car’s history, ensure you know everything you need to know about the car you are potentially about to buy. It’s a good idea to get a mechanic to take a look at the functionality of the vehicle and make sure it is actually road worthy. When it comes to looking at the car’s rego history and if there is any outstanding finance on it, you can do this online yourself. 

4. Don’t settle for a high price: Although prices are inflated at the moment, don’t settle for something outrageous. Stick to the budget you set out, and if the seller doesn’t accept your haggling then move on - there’s no point in breaking the bank (it’ll just cause you more pain later on). 

5. Find a low rate car loan: If you need lending to help you get your hands on a set of pre-loved keys, prioritise lenders that offer low rates. Compare a range of options and consider things like loan features and fees. One handy feature is the ability to get pre-approved, that way you already have the set amount you need when heading into your vehicle inspection. 

Want to start comparing used car loans today? Take a look at the options below or head to our used car comparison hub for even more!