Why you shouldn't buy a used car right now
Posted by: Lydia on 12/05/2021
Why You Shouldn't Buy a Used Car Right Now
Buying a car is always a process that can generate mixed feelings. On the one hand, it's a lot of fun to acquire a new vehicle. However, there are of course other considerations to keep in mind. For example, paying for the car, ensuring it’s in good working order, and being mindful of the current dynamics in the market.
You don’t need to be a professional car seller to know that the car market is subject to trends. This is the case with both new and used vehicles. So if you or someone you know is looking for a used car, you need to know the current state of the used car market. Unfortunately, it’s not currently a good time to buy a used vehicle — let’s look at why.
Covid-19’s Impact on the Aussie Car Market
It’s not news to any Aussie that the outbreak of Covid-19 has had a substantial impact on our economy and daily lives. This has certainly been the case within the auto industry. Due to disruptions in the regular rate of production and shipping of cars made overseas, there’s now a substantial shortage of new cars locally.
This shortage has impacted the new and used car sectors alike. Because there are fewer new cars, numerous Aussies looking for their next ride are exploring the used car market and are ready to spend more because of savings they had set aside for a new ride. The current global shortage of computer chips has also impacted this.
Then, there is also the pay packet element. Some Aussies browsing for a vehicle have potentially seen a reduction in their income since the pandemic began, or are perhaps currently between jobs. Ultimately, there are numerous factors that are contributing to this current dynamic, and they've resulted in a growth in demand in the used car market, which has translated in turn to a surge in prices seen across the sector.
When Will It End?
Unfortunately, any precise estimation of when exactly life and markets will go ‘back to normal’ is impossible. It’s unclear when regular production will resume and a steady supply of autos will be on their way to Australia once more. However, although it's impossible to say exactly when, we can make rough estimates based on current evidence.
For example, many major car manufacturing nations are now pursuing a vaccine campaign with zest, and such programs could be completed by the end of next year. It’s still uncertain whether vaccine timelines will go as planned, but if life in the ‘new normal’ is well underway by 2023, our car market will hopefully have all pistons firing once more by then.
Unfortunately, circumstances could change and cause a delay in this timeline. However, it’s also true that — just as the development of multiple vaccines last year sped up the ability to plan a vaccination rollout — some unforeseen positive developments could speed up this timeline as well.
An Exception to the Rule
As we’ve discussed, now is not a good time to buy a used car for a number of reasons. At the same time, it’s necessary to acknowledge that even if now isn’t a good time to buy a used car, it’s not an outright awful one either if your need is dire.
So if you’re really keen to shift away from your current vehicle to your next one soon — and buying a new one isn’t within the budget right now — then it’s certainly useful to note that there can always be some genuinely good deals found amidst the used car market, regardless of the broader industry trends. Just keep in mind that in some respects, doing so right now would be ‘swimming against the tide’ and may require more patience and searching to find a ride you really like.
Now an Ideal Time to Sell?
The used car market is subject to ups and downs like any other, but it’s true that the pandemic represented a substantial jolt to ‘business as usual’. Just as last year saw sellers of gym gear benefit from lockdown-driven demand — with online searches jumping over 400% in one weekend alone early in the pandemic’s outbreak in Australia — anyone wanting to do away with their used car may wonder if now is the ideal time to sell.
The answer is that it could be, but it’s important to keep in mind that growth in demand isn’t going to be universal. The factors discussed here have had a huge impact on the market overall, which has substantially limited the wide variety of options that would’ve previously been available to a potential buyer.
Sellers have to deal with a different set of circumstances. There may be an increased demand for used cars generally, but it’s possible that a particular model that an Aussie is looking to sell will still have a substantial supply locally that keeps prices relatively flat.
So just as with buying, when it comes to selling it’s important to do research to get a sense of the current appetite for a particular vehicle before going to market.
Biding Time on Buying a Used Car
Buying a car can often be a big financial challenge that requires the right combination of budgeting, timing, and a little luck. This can be particularly true in the used car market. That’s why anyone currently looking for a used car but finding it difficult should keep in mind that finding the right vehicle requires many factors being in your favour.
Given that the pandemic has upended business as usual, it’s normal to feel a little frustrated about this. But the good news is that circumstances are set to get better in the near future. Not only in the used car market, but for the auto industry as a whole. It may take some time to find a used car that ticks all the boxes, but remember that you just need to find one — and once the right vehicle has been found, it could last for many years to come.
Are you currently looking for a used car? Let us know about your experience in the comments below.