Australia Used Car Market Size, Share, Growth Analysis Report and Forecast Trends 2024-2032

Australia Used Car Market Trends

The burgeoning demand for modern vehicles in Australia has accelerated the Australia used cars market development. This can be attributed to the long-lasting impact of the COVID-19 pandemic on Australia’s automotive sector, which is recovering from a series of production slowdowns, stock shortages, and long delays in vehicle deliveries. Many consumers are now willing to pay a premium price for their vehicles, which has led to a surge in the retention value of many car models, such as Suzuki Jimny (135.2%), Toyota Yaris Cross (108.5%), Toyota Yaris (107.7%), Toyota LandCruiser (104.3%), Honda Jazz (103.7%), Toyota RAV4 (102.2%), Nissan Patrol (101.1%), and Toyota Camry (97.6%). This is creating exciting opportunities for companies offering premium second-hand vehicles to consumers.

As per the Australia used cars market analysis, consumers looking for cost-effective vehicle options are expected to benefit from improvements in supply chain management that have made numerous automobiles more cost-effective for middle-income consumers.

Australia Used Car Market Growth

Based on vehicle type, passenger vehicles (43.9%) dominated the Australia used car market share, followed by SUVs (36.9%), and light commercial vehicles/LCVs (17.3%). During October and November, overall used car sales surpassed 200,000 units, as an increasing number of consumers looking to purchase cost-effective vehicles seek shorter wait times. Based on popularity, Toyota, Mazda, and Ford emerged as the topmost-selling brands for used cars in the market, due to their innovative features and premium design. As per a collaborative study performed by the Australian Automotive Dealer Association, the sale of used cars in Australia recorded a year-on-year increase of 34.4% in 2023. The Ford Ranger was the topmost selling used car model at 65,938 units, followed by the Hilux at 65,852 units. Over the forecast period, the Australia used car market dynamics are expected to be favourably influenced by numerous factors, such as evolving economic conditions and changes to consumer disposable incomes.

Australia Used Car Market Insights

• In 2023, Australia recorded 2,074,535 sales of used cars.
• Approximately 61% of Australian used cars were sold privately.
• Based on fuel type, diesel (30.6%) and petrol (65.8%) accounted for a major portion of used car sales.

Industry News

May 2024

The South Australian parliament approved a bill strengthening the regulatory framework governing the landscape of used cars in Australia. The law aims to restrict odometer tampering in second-hand vehicles and has increased the fine for unlicensed dealers from $100,000 to $150,000. The jail term for committing any offences for the third or subsequent time was also doubled to 2 years.

September 2024

In a collaborative study of the Australian Automotive Dealer Association, the Toyota 86 sports coupe was found to have the highest retention value (98.4%) out of all 2-4 year old passenger vehicles sold in Australia in August 2024.

Australia Used Car Market Drivers

Depreciation Rates of New Cars

Depreciation rates of new cars significantly influence the Australia used car market growth. New vehicles lose a substantial portion of their value within the first few years of ownership, sometimes up to 20-30% in the first year alone. This steep depreciation encourages buyers to opt for used cars, where they can purchase relatively newer models with modern features at a much lower cost. Consumers view used cars as a better value proposition, getting more for their money without bearing the brunt of initial depreciation. As a result, the demand for used cars in Australia continues to rise, driven by this economic advantage.

Lower Insurance and Registration Costs

Lower insurance and registration costs are key factors driving the Australia used car market expansion. Compared to new vehicles, used cars typically come with significantly reduced insurance premiums due to their lower market value, making them more affordable for buyers, especially young drivers and those on a budget. Additionally, registration fees for used cars can be lower depending on the state and age of the vehicle. These cost savings make used cars an attractive option for consumers looking to minimise ongoing expenses, further boosting the popularity of the used car market in Australia as a practical and economical choice.

Opportunities in the Australia Used Car Market

Favourable price trends

Increases in average retention prices of SUVs and MPVs have emerged as one of the significant Australia used car market trends Over the last 5 years, the average price of a 2-year-old SUV has increased by 20%. For those aged 2-4 years, vehicle prices have risen 32.6% higher, while a 5–7-year-old SUV has witnessed a 35.9% increase in price. This highlights an increasing consumer preference for older SUVs, with 8–10-year-old SUVs recording a 40.8% growth in prices.

In 2023, sales of PHEVs, electric cars, and hybrid vehicles accounted for around 4% of overall used car sales in Australia. The increasing demand for sustainable and eco-friendly modes of transportation is expected to surge the Australia used car market value over the forecast period.

Market Dynamics

In February 2024, overall sales of used vehicles surged by 9.3% y-o-y while recording a monthly growth rate of 2.9%. SUVs emerged as the most popular vehicle (47.2%), followed by passenger cars, such as sedans, hatchbacks, coupes, and wagons (32.7%), and vans and light commercial utility vehicles (19.8%). The market witnessed a surge in demand for popular vehicle models, including Ford Ranger (+12.1%), Toyota RAV4 (+7.7%), Toyota HiLux (+10.5%), Toyota Corolla (+3.7%), and Hyundai i30 (+0.3%). Traditional low-riding passenger vehicles exhibited the lowest selling time of 37 days, while SUVs took an average of 40 days, followed by utility vehicles (42 days). This indicates the vibrant state of the used car market in Australia.

Market Restraints

Second-hand electric vehicles are presenting significant challenges to the Australia used car market. Though their prices have decreased by nearly 15.6% -23.4%, and their average wait times reached 75 days in December 2023, increasing consumer uncertainty about EV’s range and battery safety have hindered the growth of second-hand EV sales.

Australia Used Car Industry Segmentation

“Australia Used Car Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Vehicle Type

• Sports Utility Vehicle (SUV)
• Sedans
• Hatchbacks
• Others

Market Breakup by Vendor Type

• Unorganised
• Organised

Market Breakup by Fuel Type

• Diesel
• Hybrid/Electric
• Gasoline
• Petrol
• Others

Market Breakup by Sales Channel

• Online
• Offline

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Used Car Market Share

By Vehicle Type Analysis

SUVs are expected to grow at a CAGR of 6.1% over the forecast period of 2024-2032

Second-hand SUVs (less than 2-4 years old) are expected to gain traction among middle-income consumers since they offer a high-end driving experience at a low cost and also guarantee a high degree of passenger safety.

The Australia used car market analysis suggests that consumers exhibit an increasing preference for used utility vehicles, apart from light commercial vehicles. This can be attributed to their small size and excellent storage space, which makes them appealing to households and retailers alike. The shift towards sustainability has also increased their demand as they emit lower vehicular emissions. They are also more likely to have an above average retention value in the second-hand cars market, which makes them appealing to high-end consumers and dealers.

By Vendor Type Analysis

Rising demand for used cars from unorganised vendors is propelling the market growth

In the Australia used car market, unorganised vendors typically include individual sellers and smaller, independent dealerships. They offer a wide variety of cars at competitive prices but often lack formal warranties or after-sales support. Meanwhile, organised vendors, such as certified dealerships and established platforms, provide a more structured buying experience with quality assurance, warranties, and financing options, appealing to consumers seeking reliability and peace of mind in their purchases.

By Fuel Type Analysis

Hybrid vehicles are expected to emerge as the leading vehicle type in Australia

The Australia used car market share is dominated by petrol vehicles, which sold 1,308,274 units in 2023. These were closely followed by diesel energy (625,357 units), and hybrid vehicles (61,443 units). Electric vehicles (13,748 units) and LPG vehicles (3,233 units) accounted for around 0.9% of the market share, while PHEVs recorded 1,410 units of sales. This indicates that though middle-income households are mostly purchasing ICE vehicles, the addition of appealing hybrid vehicle models is bolstering the market growth. Over the forecast period, diesel vehicles are expected to retain a substantial portion of the market share, while hybrids and EVs are expected to gain significant consumer appeal, thereby driving the market growth.

By Sales Channel Analysis

Online sales channels are expected to grow at a CAGR of 9.4% over the forecast period of 2024-2032

The increasing popularity of online sales channels has emerged as one of the key Australia used car market trends. Many second-hand automotive dealerships have responded to the increased demand for consumer convenience by providing digital vehicle tours and brochures detailing vehicles’ past records and purchase history. Tech-savvy buyers have been able to quickly browse, negotiate, and finalise their purchases through these platforms, which has made them incredibly popular among the masses.

Offline sales channels offering a hands-on experience to vehicle buyers are expected to remain popular among people since they provide the benefit of inspecting the condition and performance of the vehicle to buyers. This makes them more confident about their purchase decision.

Australia Used Car Market Regional Insights

The Australia used car market exhibits significant regional variations, with demand concentrated in urban areas and regions with high GDP growth rates. As per the market analysis, New South Wales recorded 617,392 used car sales in 2023, closely followed by Victoria (491,441 units), Queensland (460,140 units), Western Australia (262,150 units), Southern Australia (139,129 units), Tasmania (47,393 units), Australian Capital Territory (39,713 units) and Northern Territory (17,177 units).

New South Wales (NSW), being the most populous state, leads the market with a high demand for used vehicles, driven by urban residents and commuters. Sydney, as a major metropolitan hub, contributes significantly to used car sales due to a preference for affordable transportation in a city with rising living costs.

As per the Australia used car market regional analysis, Victoria, particularly Melbourne, follows closely. The state's robust economy and diverse population sustain strong demand for used cars, especially among young professionals and families looking for cost-effective mobility solutions.

Queensland also has a notable market presence, with regional cities like Brisbane and Gold Coast driving sales. The state's expansive rural areas contribute to higher demand for durable and affordable vehicles like SUVs and utility vehicles, which perform well in both urban and rugged environments. In Western Australia, the market is heavily influenced by mining and agricultural sectors. As a result, there is a strong demand for off-road and utility vehicles in areas like Perth and remote regions. Lastly, South Australia and the Australian Capital Territory have smaller but growing used car markets, with consumers in Adelaide and Canberra seeking affordable and practical options, contributing to the overall market's steady expansion. Over the forecast period, New South Wales is expected to constitute a major portion of the Australia used car market share, at 32%. It is now expected to grow at a CAGR of 6.3%, driven by rapid economic growth and rising consumer access to high-tech models of used cars.

Competitive Landscape

Market players are focused on product innovation, strategic alliances, and effective branding and marketing strategies to stay ahead of the competition. Companies in the market compete based on various factors such as product innovation, pricing, quality, brand reputation, distribution channels, and responsiveness to consumer trends.

Key Industry Players

Jowett Motor Group Pty Ltd. was founded in 1995 and is headquartered in Victoria. It is a family-owned car dealership business with a significant presence across regions like the Australian Capital Territory and South Australia. It is a reliable partner for many automotive brands, such as Honda, BMW, and Audi, among others.

CFS Group Pty Ltd. is headquartered in Sydney. It is an online automotive software company which operates different automotive retail platforms in Australia such as virtualyard.com and carsforsale.com.au.

Global Cars Aus Pty Ltd. is engaged in providing car hire and leasing services to independent Australian travellers visiting the United Kingdom, Spain, Italy, France, and Portugal.

Peter Warren Automotive Pty Ltd. is a family-owned business of automotive dealerships that was founded in 1958 and is headquartered in Warwick Farm, New South Wales.

Other key players in the Australia used car market report include Rohanna Pty Ltd. (John Hughes Group), My Car Choice Pty Ltd., Cars Of Melbourne Pty Ltd., and CAR Group Ltd., among others.

Recent Developments

April 2023

Cars24 invested $5 million to establish a vehicle refurbishment facility in Victoria with plans to construct a new centre in New South Wales to deliver on its commitment to delivering high-quality vehicles to consumers. The company spends nearly $2,000 on refurbishing each vehicle and provides a seven-day return guarantee to its consumers.

July 2024

The Automotive Dealers Association of Australia reported an 11.6% increase in used cars, which amounted to 214,588 in July 2024. As compared to H1 2024, used car listings recorded a 25% surge in 2024 to reach 1.2 million.