Are you in the market for a new set of wheels? The good news is that used-car prices are largely continuing to fall, while new car prices have dropped 3.5% since their peak in December 2022.
COVID-induced supply chain issues have well and truly eased, and in some markets, like the US, an oversupply of new vehicles is expected to push prices down. So is now the time to buy a new or used car, or make the switch to an electric vehicle?
Here’s what to expect from the car market in 2024.
Used car sales will continue to drop
In Australia, used-car sales have been dropping dramatically of late, meaning buyers may have more legroom to negotiate on price. In December 2023, out of 276,268 vehicles for sale, only 169,312 actually sold – a clear decrease compared to November.
With oil prices expected to rise this year, vehicles that are less fuel-efficient are likely to become less desirable. Experts are anticipating that SUVs and used sedans will have significant price drops in 2024.
With supply outweighing demand, light commercial vehicles like dual-cab utes have also seen a drop in both prices and sales.
Certain vehicles are holding their value better than others
In some cases, some used-car models are worth more today than when they were purchased new.
If, for example, you purchased a Suzuki Jimny, Toyota Yaris Cross, Toyota LandCruiser, Toyota RAV4, Nissan Patrol or Honda Jazz in the past two to four years, you’d be pretty happy with today’s resale value. These models have value retention of more than 100%.
New car sales will likely continue to be red hot
In 2023, Australia broke an all-time record for new vehicle sales. In total,1,216,780 vehicles were delivered throughout the year, beating the previous highest sales record of 1,189,116 in 2017.
And if the first few months of 2024 are anything to go by, sales of new cars may continue to go gangbusters.
In February, there was a record month for deliveries of new vehicles in Australia, with 105,023 new vehicles sold. It was also the 10th consecutive month of growth. If you compare those figures to the same month last year, there was a 20.9% increase.
EVs and hybrid cars will continue to gain popularity
Demand will continue for Electric Vehicles (EVs) and hybrids in 2024, and we may see prices stay the same or potentially even increase.
Federal Chamber of Automotive Industries (FCAI) data shows that a record 10,011 full-battery electric cars were sold in Australia in February – representing a market share of 9.6%. This was a significant increase from the 4,893 sales in January. Tesla’s refreshed Model 3 was Australia’s best-selling passenger car in the month.
Tips for buying in 2024
- Do your research before you step into a dealership. Use car comparison tools, check out customer reviews and read advice about the vehicle you’re interested in.
- When budgeting for your purchase, make sure you consider all the costs of ownership – fuel, insurance, maintenance costs, the lot.
- Don’t fall into the trap of dealership finance, which may not take into account your financial situation and goals. Instead, talk to us about the different asset finance options available to you.
Need finance for your vehicle purchase?
Whether you’re looking to buy a new truck for your business or you want to join the EV tribe, we can help. Get in touch to talk about your asset finance options.
Looking to join the EV tribe or add to your company’s fleet this year? Get in touch with us to talk about your asset finance options.
