Prices of new cars soar amid ‘historic market’ conditions

Australians are paying more than 20 per cent more for new card than they were just 2½ years ago amid “historic market” conditions for the industry. New research from Price My Car found the median average price of a new car in Australia had gone up by 22 per cent since January, 2019. The data, which accounts for more than 100,000 new car prices, found prices for some of the country’s top brands like Hyundai (52 per cent), Lexus (45 per cent) and Suzuki (43 per cent) had all gone up significantly.

Price My Car founder and chief executive David Lye said two factors were driving the increases. “There’s been an increase in retail prices from the carmakers, so obviously with supply filling out and demand staying strong, they’ve taken the opportunity to up their prices and sometimes it’s happened really frequently,” he told NCA NewsWire. “But probably the most significant factor is the lack of discounts.

A few years ago you’re buying a $40,000 car, you’d expect to get $4000, $5000 or $6000 off without too much problem. That was pretty general, but nowadays people are paying full whack. ” Despite supply shortages due to Covid and Ukraine-related manufacturing issues, the demand for cars is still strong from the public.

Mr Lye said this meant there was no incentive for dealers to drop their prices, especially with carmakers upping theirs. “It’s crazy. We get customers coming to us all the time, they need a car immediately or they want a car straight away,” he said.

“So there’d be no reason for any dealership to knock even $100 off a car. Why would you when you’ve got more buyers than cars and people queuing up to buy them?” Mr Lye did expect car prices to eventually come down as supply levels returned to normal and consumers felt the brunt of the country’s economic woes. “It will change in time once production ramps up in factories overseas and we start seeing some more supply, then the market will shift a little,” Mr Lye said.

“Plus, there’s arguably expected to be a little bit of softening in demand with interest rates going up and a lot of talk about cost of living. “So if those two factors soften demand and cars start coming into the country again, then we might go back. “The carmakers are unlikely to reduce their car prices, but at least the dealers will start offering discounts again.

” But customers have been left with minimal options in the meantime, as used car prices are also through the roof. My Lye explained that because a used car seller could charge whatever they wanted, sometimes their prices didn’t stack up when compared with a new car. “Even at full retail for a brand-new car, sometimes that’s better value than buying a used car that’s a year old,” he said.

“The old story used to be when you drive a new car out of the showroom you lose 20 per cent, now it’s almost the opposite. “It’s an incredible, incredible time. It’s never happened before and who knows whether it will happen again, but it’s certainly a historic market.

” My Lye’s advice for customers is to shop around at different dealers. “If you’re trading in a car it’s not all bad news because you will get more for the car that you’re trading in. You could potentially sell it privately as well and get a really good return on that,” he said.

“But ultimately if you need a car in the next year or so, it’s going to be very difficult to get much of a saving. “If you can afford to wait until mid to late next year, I’d imagine the discounts would start coming back in. “If not, you’ve just got to suck it up, and at least you know when you get that car it’s going to hold its value better than ever before.

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