Will 2022 change how you sell your car?
The car industry has been upended over the past 2 years due to a host of factors driven by the global pandemic.
Quarantine and lockdown challenges left many cars standing at shipping docks across the world, while shortages in global supply chains and semiconductor chips impacted production and the launch of new vehicles – including electric cars.
More recently the Russian conflict and extreme weather events further impacted delays on new cars, now projected to drag on until 2025.
How is the Aussie market faring?
In this current climate, the demand and price for used cars in Australia has soared. Moody's Analytics has shown used cars are selling for 65% more in 2022 than they were before the pandemic, with 18% of the rise occurring over the past 3 months.
The flood disaster on the east coast earlier this year exacerbated demand, with 20,000 cars being written off by insurance companies in Sydney, northern New South Wales and Brisbane. This has placed a greater strain on an already limited supply of cars, surging the price of used cars by approximately $11,000 to $33,000 higher than pre-pandemic. The latest NSW flood disaster has potential to impact this further.
Traditionally deemed as a "bad investment", in 2022 cars have become mini-assets and it's never been a better time to sell a used car. But beware, once supply chain issues are rectified and new cars begin to flood the market, used car prices may very well correct themselves.
How can you capitalise on the market for your used car?
With no signs of the global supply chain and chip shortages slowing, new vehicle wait times can be up to 12 months. So, demand for quality used cars will continue to soar. For those looking to sell, options have broadened as new platforms to buy and sell enter the market.
In fact, car dealers have become a ripe target market – in need of stock and a new willingness to pay top prices to fill up showrooms.
Since I launched Sell2Dealers in March, I have seen car prices continue to climb and car stock decline. I have heard reports of dealers purchasing back cars they sold to consumers years earlier, for much higher prices than originally bought. These market conditions are definitely unique.
Should you sell your used car to a dealer or privately?
As with everything, there are advantages and disadvantages to both options, so it really comes down to assessing what suits your situation best.
Let's look at both sides.
Selling your car to a dealer
Pros
- There is less time invested in selling
- No face-to-face car inspections involved
- Dealers organise the paperwork once the sale is made, including registration, roadworthy certificates and settling with the bank
- Options for traditional dealerships or online, contactless platforms
Cons
- Traditionally, you risk a lower sale price than what's on the market as the dealer needs to make a margin
- If your car isn't a big seller in your local area, you will get less as the car will sit in the yard for longer
- You are limited to your local area for buyers and you need to drive around to gauge the best price
Want to upgrade? Check out Finder's tips on getting the best trade-in deal for your car.
Selling a car privately
Pros
- May help you secure a higher price than a local dealer would pay
- Private buyers might be willing to pay a lot more than the market price with limited stock on cars
- If you're not in a rush to sell your car, you can bide your time until you get the right offer
Cons
- There is more time involved in a private sale
- Buyers may try to bargain you down on price
- You have to host inspections and test-drives before finding the right buyer or even a serious buyer
- You have to organise the paperwork and potentially re-financing for the car
How to decide whether to sell a used car privately or via a dealer
The best way to determine which way to sell your car is to do desk research to find out how popular your car model is. Do some research on the car, model and market so you have a clear idea on how popular the model is, as well as price expectations.
This can help you decide if you are happy waiting for a certain price in a private sale, if you need to sell the car with a shorter turnaround through a dealer or directly through a platform like Sell2Dealers. You should also remember to shop around for the right dealer, online sale platform or one of the new services that are available to help you sell your car.
What is the best approach to valuing your second-hand car?
The best way to gauge the value of your car is to visit at least 2 marketplace websites and look at what other people are selling their car for.
Keep in mind that some cars may have been on the market for a few months if they are priced higher than other cars. You can ask your local dealer what they would pay for the car and then you can determine your selling price.
Whatever route you decide to take when selling your car, keeping it clean and well-maintained with all the paperwork ready to go will help you get a sale at a price that matches the market.
Desmond Sanborn is the founder and CEO of Sell2Dealers, a modern, easy and convenient automotive marketplace that allows Australians to sell their used vehicles to registered dealers anywhere in the country, with no buyer's or seller's premium. He has over 20 years of experience in business development and analysis for the automotive sector, with a strong track record in global client management and a high level of service delivery.
Disclaimer: The views and opinions expressed in this article (which may be subject to change without notice) are solely those of the author and do not necessarily reflect those of Finder and its employees. The information contained in this article is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort. Neither the author nor Finder has taken into account your personal circumstances. You should seek professional advice before making any further decisions based on this information.
Images: Getty Images, Supplied
