Has Used Car Prices increased During COVID-19?

During the peak period COVID-19, many people were scared to use the public transport and got in the market to buy a cheap, used car with the plans of selling it when everything gets back to normal. This drove the used car prices by almost 50%. Suddenly the cars that no one was interested in were going up in value.

However, the trend didn’t last long as more and more people were forced to work from home therefore didn’t need to travel. Despite the decreased buyers, the used car prices haven’t nose driven as expected.

This graph by Moody’s Analytics shows how used car prices skyrocketed in 2020. According to the data, used car prices in Australia has risen by 49% since April 2020. Michael Brisson from Moody’s state that used cars had price tags similar to those of manufacturer’s recommended sale price, which is way above what a person should pay.

In normal circumstances an older car with more kilometers should be priced as such  – lower than newer cars. However as Michael Brisson points out, this correlation no longer exists in the used car market.

Just to show how people refused to use public transport there was a poll in which people were asked about their daily use of it – before March, 15.4%  of men and 14.2%  of women  said they use it almost everyday. These numbers fell to 4.9% and 2.9% accordingly in October. There are those that owns an old car and would probably sell it as scrap for cash for cars companies such as Scrap cars removal.