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When will used car prices start trending down and by how much?

This is the question on the lips of anyone and everyone that has some form of exposure to the movement in used car prices. While the answer to that question remains to be seen, what is certain is that volatility in the Australian market is here to stay and isn’t projected to be equal across all vehicle types or segments.

The start of the 2023-24 fiscal year has brought some noteworthy shifts in government policies, and if you’re in the market for a car, you’ll want to pay attention. Two big changes have caught our eye: the end of the increased Instant Asset Write-off provision and a hike in the luxury car tax (LCT) thresholds. This has sparked various reactions from car manufacturers in Australia, particularly in the form of Recommended Retail Price (RRP) adjustments.

There is a significant focus on Electric Vehicles (EV) at present and the rise in popularity in the last 12 months has been meteoric for some brands/models. For now, the bulk of consumer EV intention relates to new cars, the latest and greatest, and while not entirely out of reach, the fact is these vehicles remain considerably more expensive than non-EV alternatives.

Cost of Living pressures are biting in the second half of 2023. And while much of the commentary is related to energy costs and mortgage rates, central to many Australian households, is the cost of car ownership.

Plenty has been written about record used car prices with much of the blame firmly attributed to the lack of new car supply. While very strong consumer demand has also contributed, the forgotten driver is higher new car prices.

It’s very hard these days to publish any type of industry update without commentating on Electric Vehicles (EV) and the subject of their residual values (RV) is a hot topic.

Nothing hints more to a return to ‘normal’ trading conditions than brands advertising special retail offers to entice buyers into the market. While not all offers represent genuine savings, they are a signal to the market that brands are restocked and wanting to increase the pace of new vehicle sales.