Used car prices set to soar

Via Moodys:

Wholesale used-vehicle prices rose to all-time highs across Australia in June. Following a record-breaking monthly increase in May, June doubled down on the historic gains. Used vehicle prices were up 11% from May to June and a mind-boggling 23% from the lows reached in April, according to the Datium Insights–Moody’s Analytics Price Index (see Chart 1 below).

Key points from the attached report are as follows –

  • Australian wholesale used vehicle prices are up 23% from the lows reached in April.
  • Wholesale prices rose only 23% from the depths of the 2008-2009 global financial crisis to the beginning of 2020.
  • Demand for vehicles remained high as the economy re-opened in earnest and public transportation remains an unattractive option.
  • Both new and used vehicle supply remains low, pushing up prices of available inventory.
  • Price decreases are expected over the next two quarters.
  • Prices will be pushed down because of more vehicles reaching the market and labor market concerns sapping consumer demand.

It appears to be a global phenomenon.

With public transport buggered for good, second car purchases are the driver, I’d guess.

Houses and Holes

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