With second hand car prices through the roof, is it time to sell?

With Australia undergoing a severe car shortage and fuel prices soaring, you might be eyeing up that car in the driveway and wondering if it’s worth it.

Second-hand cars in Australia are hitting peak prices, with data from Moody Analytics showing used cars are selling for 65% more in 2022 than they were prior to the COVID-19 pandemic: 18% of that has happened during the last three months.

If you’ve been seduced by the work from home lifestyle, you might not be putting as many miles on your motor as you once were. With cars no longer dramatically depreciating in value in the same way they used to, it could be time to think about whether your car could be worth more on the market than in your garage.

What is my car costing me?

A report from the Australian Automobile Association puts the national average transport cost per year in capital cities at $20,855 (and $17,195 in regional Australia). This average is based on a two car home for two people in their thirties who don’t use public transport. These amounts are both up more than $2,000 on their 2019 costs.

In the last month alone, we’ve seen car loan interest rates begin to move upwards, increasing the cost of repayments along with rises in fuel costs. We can safely say that car running costs for cars have gone up, even with WFH lifestyles being more dominant. 

With more and more alternatives to car ownership - widespread public transport (estimated by the Australian government to be 30 times more affordable than car ownership), car sharing, and ride share applications - as well as more and more people opting for green cars, you might have been tempted to make a change. 

Should I sell my car?

If you are thinking of trading in your car for an eco alternative or going full-time public transport, this could be the perfect time.

Traditionally, cars depreciate in value immediately on purchase. The more kilometres you have on your odometer, the more the resale price decreases. Unable to add on value onto a car, the prospect of selling yours might never have seemed particularly enticing! Things are a little bit different at the moment.

With the limited supply of new cars to the market, recent conditions have seen some used cars selling for close to new car prices.

Lloyds Auctions have recently seen cars with relatively low mileage - take a Toyota Landcruiser GXL Ute with 34,000km on the odometer which sold for roughly $8,000 above the RRP for $82,000 due to high demand for the make. 

Electric vehicles are also in high demand - reflecting the rest of the market - with Teslas selling at Lloyds-owned car yards for $5,000 above standard retail pricing.

If your vehicle is a sought-after model, no longer just classic cars and luxury models, you could be sitting on a gold mine. The Suzuki Jimny, a popular lightweight 4x4, is valued at roughly $30,000 but can be seen in second-hand listings for $50,000.

What if I’m looking to buy a car?

If you’re looking to take advantage of the high prices on the second-hand market, there are some things to consider.

It’s not as simple as selling your car for a great price and snatching up something easy. If you are looking to buy again, you’ll be buying in the same market as you sold, and the market is in a state. New cars are hard to find, followed by long waitlists and second-hand prices are inflated. 

While we’re big fans of public transport and love making use of ride shares, sometimes you just need a car of your own. This is the reality in areas less serviced by public transport especially. If you’re looking to buy a second-hand car, high prices and rising rates may see you needing a larger sum than you thought previously.

In the market for something new to rev your motor? Take a look at some of our best car loans and our guide to buying a used car. If you're looking to sell a financed car with an outstanding loan, make sure to read our guide.