Australia’s used car market is in overdrive with a shortage of vehicles leaving dealers chasing former customers to offer competitive buy-backs as they scramble to fill their lots.
Others are scouring online marketplace websites and social media sites to contact those wanting to sell used cars privately.
In an email seen by the Guardian with the subject line “We want your Mazda3!” a New South Wales car dealer emailed former customers offering to buy back the cars they sold them years ago.
“We are paying top dollar for your vehicle and even better, you will RECEIVE the money SAME DAY! How good is that?” it said.
Others who have been trying to sell privately say they have been contacted directly by dealers and car-buying services after placing ads on Facebook and GumTree.
Australia’s new and used car market is experiencing unprecedented demand, due largely to supply chain issues.
Paris Lord, 45, from Canberra said he was contacted by “a few” dealers before he sold his plug-in Mitsubishi Hybrid 2017 Outlander in March this year for $32,000.
Lord, who sold because there was no plug in the basement car park of his new residence and because he wanted to go car-free, said he didn’t mind taking a small loss on the sale.
“I was selling it privately for a reason and didn’t want their alleged service,” Lord said. “One of them took it for a test drive and still wouldn’t increase their offer. Usual palaver. ‘Aww mate, the tyres need replacing’, blah blah.
“Their offers were too low. I knew they would jack up their sticker price, because of the shortage of cars and other supply chain dramas.”
A semiconductor shortage has plagued manufacturers of electronic goods since the start of the pandemic with one analyst quoted in Wired describing computer chips as “the new toilet paper” of the global economy.
Carmakers, who cancelled their orders at the start of the pandemic only to be blindsided by a huge uptick in demand, have since been left at the back of the queue.
The general manager of motor vehicles for Pickles auctions, Brendon Green, said prices are 150% higher – about $8,000 to $10,000 – than before the pandemic.
“Traditionally when a business, government entity, or private buyer receive a new car, they dispose of a used vehicle,” Green said.
“Due to the lack of vehicle turnover, our auctions are extremely competitive among dealers which has driven used car price up, so it’s no surprise they are getting creative when trying to source used vehicles.”
The situation means Australians are left waiting an average of 146 days to get hold of a new vehicle.
According to PriceMyCar those in Western Australia spent the longest on wait lists with queues averaging 239 days, closely followed by the Northern Territory where times are about 180 days.
Among the models taking the longest to arrive was the Land Rover Defender which has a wait time of 357 days and the Toyota RAV4 which takes 293 days on average to arrive.
The founder of PriceMyCar, David Lye, said car dealers were being forced to be “very aggressive” and creative in how they source their stock.
“Car dealers have embarrassingly empty showrooms, so they’re hitting the phones, hitting people up on CarSales, so they can buy them directly,” Lye said.
Lye said some dealers may find “flexible” ways to inflate delivery prices but their franchise agreements meant they could not sell a car for more than the recommended retail price.
He said most price gouging occurred in the individual market where private sellers were listing prices many thousands more than what would be expected.
“There are plenty of instances of private buyers, regular Australians, buying a car, taking delivery, sticking it in their driveway, adding $20k to the price and putting it on Carsales,” Lye said.
On Tuesday, Kia Australia said some customers were buying new EVs and selling them immediately with a markup – with many other customers left empty-handed as waiting lists blow out and allocations of 100 or less vehicles sell out within minutes.
“The major problem that we’re facing at the moment is the flipping of retail customers what they’re doing with the cars once they bought it,” Kia Australia chief operating officer Damien Meredith told the Driven.
“We’ve heard stories of people buying a car again, on the east coast, the Sydney Metro and they’re turning up in Western Australia, with a premium of $8,000 to $10,000 on them. So there seems to be a customer flipping exercise,” he said.
In January the Australian Automotive Dealers Association (AADA) and other industry observers thought supply chain shortage would ease and prices would begin to drop from mid-2022 until the end of the year.
But the ADAA chief executive, James Voortman, said the situation has only worsened with the invasion of Ukraine which has “highlighted some additional chinks in the supply chain”.
“We are hopeful the automakers can pivot and manufacture key components in other areas of the world, and still hopeful that the situation will start to improve by the end of the year,” Voortman said.
“Right now we can’t even be honest with our customers about when certain models are arriving, there’s just too much uncertainty and, frankly, it’s been like this for almost two years now.”
• This article was amended on 8 June 2022 to correct a misspelling of Brendon Green’s name.
