Kiwis Making Money On Their Used Cars As Prices Increase 35%

Used car values have accelerated as a result of the pandemic, with the median asking price increasing by 35 per cent since 2019 to reach $13,494 in July, according to the latest Trade Me Motors data.

Trade Me Motors Sales Director Jayme Fuller said in the past year alone, the median asking price for a used car in New Zealand has increased by nearly $2,500. “Unusual market conditions as a result of Covid-19 have seen car prices skyrocket and in July, prior to the latest lockdown, the national median asking price jumped by 23 per cent in just 12 months.”

National median asking price for a used car in New Zealand

And for the first time, Ms Fuller said current market conditions have resulted in a phenomenon where Kiwis are selling their cars for more than they originally paid, despite adding more kilometers to the clock. 

“Anyone will tell you that you start losing money on your car as soon as you drive it out of the dealership and traditionally cars have been well known to be depreciating assets. However, our latest data shows that’s no longer the case, with many Kiwis actually making money on their used cars.”

Ms Fuller said there were a number of factors behind the increases. “Ongoing global shortages in the market have meant there has been a drop in supply of both new and used cars entering the country. When compared with the same month in 2019, prior to the pandemic, we saw a 27 per cent drop in the total number of cars listed onsite in July.

Demand for cars has also taken off since the beginning of last year. ”With our borders closed for 18 months, many Kiwis are redirecting their overseas holiday funds to purchase big ticket items like a new car. In July we saw a 65 per cent increase in views and a 36 per cent increase in watchlists on used car listings onsite when compared with the same month in 2019.

“This combination of low supply and high demand has put enormous pressure on the market and is driving prices up.”

Looking ahead, Ms Fuller said it’s difficult to gauge how long it will take before the used car market looks like it did pre-Covid. “We’re not likely to see a change until the country’s used-car inventory returns to healthier levels, which is realistically not going to happen for at least another year.”

New Zealand’s most loved models see prices jump

Ms Fuller said prices were impacted across the board, with increases seen in higher value cars, too. “For cars over $15,000, the median asking price increased 12 per cent in July when compared with the same month in 2019, while cars over $25,000 saw an 11 per cent jump in the same period.”

Looking at the median asking price of New Zealand’s most popular model, the Toyota Hilux, showed how much prices had shot up over the past two years. “In the past seven days alone, we have seen over 136,000 searches for Hilux onsite and it has long been New Zealand’s favourite vehicle.”

In July this year, Ms Fuller said the median asking price of a 2016 Toyota Hilux was sitting at $39,490. “This marks a 9 per cent increase when compared with the median asking price of the same car in 2019, even though it is now an older model.

“We’re also seeing Kiwis flock to buy a Hilux before the Government’s Clean Car scheme comes into effect next year and they face extra charges on utes. This will no doubt be playing a part in the price growth of this make.”

Ms Fuller said two more of New Zealand’s most loved models, the 2016 Ford Ranger and 2016 Mazda Axela, had also seen a year-on-year increase in value in July. The only model to buck the trend out of the top five most popular Kiwi vehicles was the 2016 Suzuki Swift which saw no price change when compared with 2020.

Median asking price of NZ’s most searched-for cars

At this stage, Ms Fuller said it was too early to say whether car prices will continue to climb.

“As we come out of the latest lockdown there is a bit of uncertainty going forward, but one thing is clear; there's never been a better time for Kiwis to sell their vehicles. Even if you don’t think the car you’re trading in is worth much, you may be pleasantly surprised.”

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