Are you considering a new vehicle? The encouraging news is that prices for used cars are generally still decreasing, and new car prices have declined by 3.5% since reaching their peak in December 2022. Supply chain disruptions caused by COVID have significantly eased, particularly in markets like the US, where an excess of new vehicles is anticipated to drive prices down.
So, is this the right moment to purchase a new or pre-owned vehicle, or to transition to an electric vehicle (EV)? Here’s a preview of what to anticipate in the car market in 2024.
Used car sales will continue to drop
In Australia, there has been a significant recent drop in used-car sales, providing buyers with increased bargaining power on pricing. In December 2023, out of 276,268 vehicles listed for sale, only 169,312 were sold—a noticeable decrease compared to November.
Given the anticipated rise in oil prices this year, less fuel-efficient vehicles are expected to become less attractive. Experts predict significant price drops for SUVs and used sedans in 2024. Additionally, due to supply exceeding demand, light commercial vehicles like dual-cab utes have also experienced declines in both prices and sales.
Some vehicle models are maintaining their value better than others
In certain instances, certain used-car models are currently worth more than their original purchase price when new. For example, if you bought a Suzuki Jimny, Toyota Yaris Cross, Toyota LandCruiser, Toyota RAV4, Nissan Patrol, or Honda Jazz within the past two to four years, you would likely be pleased with their current resale value, which has surpassed 100% of their original price.
New car sales will likely continue to be red hot
In 2023, Australia set a new all-time record for new vehicle sales, with a total of 1,216,780 vehicles delivered throughout the year, surpassing the previous highest sales record of 1,189,116 in 2017. If the first few months of 2024 are any indication, sales of new cars may continue to be very strong.
In February, there was a record-breaking month for new vehicle deliveries in Australia, with 105,023 new vehicles sold. This marked the 10th consecutive month of growth. Compared to the same month last year, these figures represent a substantial increase of 20.9%.
EVs (Electric Vehicles) and hybrid cars will continue to gain popularity
Demand for Electric Vehicles (EVs) and hybrids is expected to persist in 2024, and there is a possibility that prices may remain stable or even increase.
According to data from the Federal Chamber of Automotive Industries (FCAI), a record 10,011 fully electric cars were sold in Australia in February, capturing a market share of 9.6%. This marked a significant increase from the 4,893 sales recorded in January. Tesla’s updated Model 3 was the top-selling passenger car in Australia for that month.
To explore current federal and state/territory incentives for EVs, you can find more information here.
Tips for buying in 2024
Need finance for your vehicle purchase?
Interested in joining the EV community or expanding your company’s fleet this year? Contact your 1st Street Mortgage Broker to discuss your asset finance options.
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